Celebrity paparazzi?
Sad.
Sad.
Kodak Stock Down to $5.45
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OMG. Time to stock up on more film. I am old enough that one freezer full should do it.
DPR has a good story on Kodak's mining hardware:
https://www.dpreview.com/news/47227...-will-let-you-rent-it-for-3-400-for-two-years
https://www.dpreview.com/news/47227...-will-let-you-rent-it-for-3-400-for-two-years
This is just sad, sad, sad. For a long time Kodak had a Gelatin making plant about 3 miles from me in the next town over. It employed a lot of people. At one time we had the big 3. Kodak, Sylvania, and GE Jet engine plant. They offered good paying jobs for those who wanted to work. Now there's just GE. I don't know how many lost their jobs, but it's in the thousands.
GE isn't in good shape too. It's amazing how far they have fallen over the past few years as well.
I saw this story in today's news. The underlined part is very ominous. It looks like an investigation has been opened up regarding Kodak insider trading.
Shares of Eastman Kodak dropped 21%, losing a portion of the 90% gains they made yesterday amid news that the iconic photography giant had decided to get into the cryptocurrency business. Kodak said it would create its own KodakCoin as well as offer customers a chance to mine bitcoin and other cryptocurrencies using its own proprietary mining equipment. Skeptics noted that the underlying business objective didn't seem to require the use of a blockchain-based solution, with customers paying for image licensing rights using KodakCoin rather than money. Some of the decline also likely stemmed from concerns about the propriety of insider transactions involving Kodak restricted stock units immediately before and after the strategic announcement. Kodak will have to work hard to convince investors that it's not just trying to cash in on the bitcoin craze.
Shares of Eastman Kodak dropped 21%, losing a portion of the 90% gains they made yesterday amid news that the iconic photography giant had decided to get into the cryptocurrency business. Kodak said it would create its own KodakCoin as well as offer customers a chance to mine bitcoin and other cryptocurrencies using its own proprietary mining equipment. Skeptics noted that the underlying business objective didn't seem to require the use of a blockchain-based solution, with customers paying for image licensing rights using KodakCoin rather than money. Some of the decline also likely stemmed from concerns about the propriety of insider transactions involving Kodak restricted stock units immediately before and after the strategic announcement. Kodak will have to work hard to convince investors that it's not just trying to cash in on the bitcoin craze.
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Wow! If the investigation shows insider trading happened it could be very serious, possibly even jail time for some people. Remember Martha Stewart?
It closed the week today up $.80 at $9.20
Matt Levine did a follow up post on it. Turns out the insider trades were part of a regular buying pattern. However, it's "convenient" that the board chose a few days after their options vested to release their news....
Planning this announcement means they knew about it for a while. I wonder if you'd find internal emails at Kodak discussing whether or not to release the crypto news specifically after the options date. If they did, that could potentially be illegal insider trading. Good luck getting access to those emails though, I wonder if the SEC will care.
https://www.bloomberg.com/view/articles/2018-01-12/giants-still-walk-the-earth-at-banks
Here's more info on this story. It is incredible how horrible this looks for Kodak. It's like they don't even care about their brand anymore.
https://www.thephoblographer.com/2018/01/12/kodaks-shady-ces/
There's no doubt in my mind that this is 100% insider trading. Kodak board members bought stock before the announcement and sold it right after.
Next stop for these Kodak people is probably the Trump administration.
The announcement was timed for the first day of the CES show.
Yes it was. CES is a showcase for new products and technologies that drive the industry forward. It's a place where halo products are launched that strongly promote the brands of corporate leaders.
Kodak's strategy made them an absolute laughing stock. No one besides gambling day traders thinks that this cryptocurrency will generate any income for Kodak. Nobody who has even a novice level of understanding about bitcoin mining thinks that money can be made(any money at all) from Kodak's scam hardware leases. There are multiple articles across various tech web sites showing people why they should not fall for Kodak's dishonest scam. It's truly embarrassing to see a once great corporation pander to such a low level.
GE's & Kodak''s afflictions and turnaround prospects are quite different.
Virtually every single line of business that the present Kodak entity is engaged in can be considered to be experiencing a secular decline.
Sadly, this is almost certainly true for the motion picture film division, too, as both Hollywood and Bollywood are in declines. A modest uptick in still pictorial film sales - does not begin to offset the declines in motion picture films, printing plates, commercial digital printing, etc.
Even the Kodak UKP acquisition of what became Kodak Alaris was likely driven by the UKPs ability to realize tax depreciation benefits from legacy plant, property, and equipment. Rules have tightened recently in the UK, EU and elsewhere concerning the legality of claiming such depreciation and I've held a sneaking-suspicion that this so-called Ektachrome revival is, in effect, motivated by a need to comply with such regulations. In any event, the cashflow from such depreciation plays out, anyhow, with the passage of time and this makes me less-than-sanguine about the chances of Kodak's still film unit (or any part of Kodak Alaris, really) surviving a bankruptcy of KODK.
You are, of course, 100% correct.
Kodak downsized its film production infrastructure substantially circa 2002-2004. Unfortunately, this infrastructure is far-too-large to service the current market and even if we see a modest uptick continue in the sale of still, pictorial films - reductions in their motion picture film sales arising from the accelerating decline of traditional players in the movie business - will more than offset that.
Against that backdrop - it is difficult to see any investor coming forward with the capital to once again "right-size" their production infrastructure.
I doubt the board members, themselves, executed a "pump and dump". The efficacy of the SEC is, indeed, suspect - but this would be proverbial case of catching-fish-in-a-barrel for them. The board members of Kodak are mostly VC-people who don't individually own much of the stock - it's not really worth the risk.
My gut tells me that the "pop" was the result of modern high-frequency-trading (i.e. a "melt-up") and that the crypto-nonsense displayed at CES represents a desperate attempt to get players like the Blackstone Group (a large, existing holder off KODK which has numerous investments in blockchain-related ventures) to provide some more financing.
MattKing
Moderator
The plant and property at Harrow were decommissioned and sold - in 2016 I believe.
One can be an inside trader without doing a pump-and-dump.
Correct but the Personalized Document and Imaging Business is part of Kodak Alaris, which is owned more-or-less outright by the UK Kodak Pension Plan. The UK KPP pays KODK some fees for licensing, etc. and they receive certain transfer payments back from KODK. This arrangement was part of settling the $2.8 billion claim by the UK KPP against EK - without which a Ch. 11 bankruptcy re-org would have been impossible.
MattKing
Moderator
So when you were referring to "legacy plant, property, and equipment" you were referring to assets that were retained by Eastman Kodak, not to the Harrow "legacy plant, property, and equipment"?
Yes, it is my understanding that KodakAlaris owned by the UK KPP is transferred the money that KODK (Eastman Kodak) can claim with the IRS resulting from deprecation of any infrastructure related to the Personalized Document and Imaging unit that existed at the time of the settlement - wherever that be located. In return to settling the claim, KODK got $650 million in "non-cash consideration". Usually "non-cash consideration" means some sort of stock grant/award - but I doubt that's the case here and I have no idea what it represents.
MattKing
Moderator
Interesting - my recollection was that the $650 million was cash, not "non-cash".
Yes, but executing this on a compressed timeframe is very hard to do.
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