Taking a Bath with KODAKCoin and the Eastman Kodak Co (KODK)
Nearly a year after the Eastman Kodak Co (KODK) took the crypto plunge, its KODAKCoin cryptocurrency is nowhere in sight.
Instead, Kodak is pushing KODAKOne, a blockchain-powered platform for photography and image management. To explain, KODAKOne offers image registration, rights management, transparent accounting, and a community marketplace for photographers.
Notably, both KODAKOne and KODAKCoin are apparently the work of a company called RYDE Holding Inc.—not the Eastman Kodak Company (NYSE: KODK). However, the Eastman Kodak Co (KODK) still exists and its stock is still trading on the New York Stock Exchange (NYSE).
Is the Eastman Kodak Co (KODK) really behind KODAKCoin?
Confusingly RYDE Holding, Inc., has a brand licensing agreement to use Kodak’s name on the KODAKOne platform and KODAKCoin.
Venice, California, based RYDE Holding is a blockchain development and operations team. Apparently, RYDE’s goal is to build a platform where artificial intelligence manages digital imagery. In addition, KodakOne will pay image owners in KODAKCoin.
However, no details of KODAKCoin are available. For instance, the RYE team is not saying what blockchain technology they will use. Will KODAKCoin be Ethereum based, built with EOS, or use a proprietary solution? Such details would be nice.
A “roadmap” at the KODAKOne website states a “payment blockchain” began development in 3rd Quarter 2018. However, no details of the payment blockchain are available.
Instead, RYE claims it will conduct a beta test of KODAKOne in 4th Quarter 2018. However, 2018 is almost over and there is no sign of the beta phase.
What is happening at the Eastman Kodak Co (KODK)?
Notably, RYE did not begin development of KODKOne’s payment blockchain; one of its key technologies until Summer 2018.
Hence, they did not begin building the technology behind KODAKCoin until several months after they promised it. In addition, the initial cryptocurrency offering (ICO) of KODAKCoin is apparently, permanently delayed. Tellingly, they promised the KODAKCoin ICO for January 31, 2018, and it was still missing in action on 20 December 2018.
On the other hand, Kodak claims 40,000 people signed up for the ICO, USA Today reports. However, it is unclear what those people signed up for in the ICO.
Is the Eastman Kodak Co (KODK) making Money?
Strangely, the Eastman Kodak (KODK) is making a little money without KODAKCoin.
Kodak reports a gross profit of $65 million and a net income of $19 million on revenues of $366 million for 3rd Quarter 2018. Yet those revenues shrank at a rate of -3.43 during 3rd Quarter 2018.
Revealingly, Stockrow reports Eastman Kodak’s revenues have been shrinking for nine straight quarters. Moreover, its business is losing money. For instance, Eastman Kodak reports an operating loss of -$6 million for 3rd Quarter 2018.
Beyond, that Eastman Kodak had an operating cash flow of -$30 million, a financing cash flow of -$2 million, and a “free cash flow” of -$37 million for 3rd Quarter. Plus Eastman Kodak reports negative cash flows for eight of the past 10 quarters.
Thus, the Eastman Kodak Co is burning cash by staying in operation. Not surprisingly, Eastman Kodak reported cash and equivalents of $248 million, and total assets of $1.54 million on 30 September 2018.
Eastman Kodak Co (KODK) has no value
I conclude the Eastman Kodak Co (KODK) has no value because it is not making money. Hence, Mr. Market overpriced KODK at $2.82 a share on 20 December 2018.
My conclusion is that the only value at Eastman Kodak is its ticker symbol. The RYDE team is apparently using that symbol and Eastman Kodak’s corporate shell to promote its KODAKOne platform. Obviously, Eastman Kodak will lose what little value it has if it gets delisted. I predict delisting is imminent because of the shenanigans the RYDE team is pulling.
Unfortunately, the KODAKOne venture and KODAKCoin are purely theoretical. Since neither KODAKCoin nor KODAKOne is operating nobody can say what value they might have.
This is a very sad end for a great American brand like Kodak. Hopefully, other companies will learn from Kodak and change with the times. When companies refuse to evolve they end up like Eastman Kodak. That is grasping at straws in a desperate bid for survival.
Everybody needs to stay away from the Eastman Kodak Company until RYDE produces evidence that KODAKOne is for real.