Eastman Kodak’s(KODK) stock price has jumped over 100% today, even after going up over 65% yesterday, hitting a high of $13.28, after opening up 2018 with a price of $3.10. Turns out that they are jumping on the Blockchain bandwagon, as announced at the Consumer Electronics Show in Las Vegas. As a Gen Xer, I remember Kodak through having to buy film for my camera as a kid, and waiting for the film to get developed hoping my pictures turned out decent and that I didn’t accidentally close my eyes, ruining the “Kodak moment” that can never be repeated. I haven’t heard any significant news from Kodak in a very long time. I thought read that they went bankrupt, and assumed some big corporation bought the Kodak brand name, and buried it in a brand portfolio somewhere. Then, all of a sudden, Kodak stock shows up on Price Change alerts as they announced a breakthrough project concerning a blockchain project, and developing a cryptocurrency coin.
It’s All About the Blockchain
At the Las Vegas CES, Kodak announced they were introducing the KodakCoin, to be built on a decentralized blockchain platform called KodakOne. This blockchain platform will be used to distributed digital ledger to store and protect photographers owner rights to archived and new images and photographs. The cryptocurrency KodakCoin will be used as a payment system for photographers and image owners for their licensed work stored on the blockchain. While the purpose of this project is a noble cause for photographers and media agencies, doesn’t this functionality already work well with Shutterstock, Getty Images, and Flickr? These are centralized website cloud applications with website front ends, but why need a decentralized blockchain platform? Does the cost to build this improve the current image protection system for photographers and agencies?
Also, KodakCoins add a process step for photographers to make a living. To make these coins useful for payment for photographers, it would need to be converted to either Bitcoin or U.S Dollars(or any fiat currency) to be practical. A possible benefit to being paid in KodakCoins would be if photographers and agencies can readily use this cryptocurrency to buy equipment or services from participating vendors and suppliers in the industry.
Wall Street Welcomes Kodak Back
The magic word for the marketing and public relations departments of public companies is “blockchain”, “Cryptocurrency”, or “Coin”. In recent months companies who either mention any of these words or go as far to add “Blockchain” to their company name will automatically receive a bid and a huge spike in the stock price. The best example is when the tea company, Long Island Iced Tea, announced that they will change their name to “Long Island Blockchain Corporation”, and they stock price of the company immediately jumped from $2.15 to a high of $9.49, well over 400%.
In two days after announcing their latest blockchain project, Kodak’s stock went from $3.10 to a high of $13.28, but has pulled back to around $9.34 as day traders and investors have locked in some profits. Is Kodak worth the investment? At this time, No. We would need to hear more about the details, for example, the execution and process of how the photographers get paid or how a customer can review or buy images from the photographer through this blockchain system. Most importantly, what is the level of interest from the photographers and agencies? Is there a demand from these stakeholders?