About one century ago, Eastman Kodak was in the headlines as a pioneer in photography. Its $1 Brownie Camera made it in the books of history. But, the world’s fast shits and the technological breakthroughs meant for Kodak the end of an era and the beginning of a new and fast-moving world where digital is the Word. It seems that for Eastman Kodak going digital was too much, as the company has filed for bankruptcy. This is the end of a titan.
As consumers worldwide decided to leave the film for photography enthusiasts, revenues soon begun to dramatically drop for Eastman Kodak. The company had to file for bankruptcy under Chapter 11 with the U.S. Bankruptcy Court in Manhattan with listed assets of $5.1 billion and a staggering debt of $6.8 billion.
Soon after the announcement, the company’s shares closed at $0.55, up 81.8 pct in premarket.
Bloomberg writes that Kodak’s revenue has plummeted by half since 2005, to $7.2 billion in 2010. Since 2008, the company has lost over $1.76 billion. At the same time, recent data shows that at the end of its third quarter, Kodak’s cash and equivalents dropped to $862 million from $1.4 billion just one year earlier.
With the bankruptcy, Kodak will be able to find buyers for at least some of its over 1,100 digital patents, which account for an important part of the company’s value. The process will also help Kodak to gradually reduce its business operations and manage to survive through the years of bankruptcy. Earlier this year, the company successfully took a $950 million loan from Citigroup.
On January 5th, Moody’s Investors Service intervened and cut ratings on about $1 billion of the company’s debt with a negative outlook, citing “a heightened probability of a bankruptcy over the near – term.
Robert Burley, an associate professor at Toronto’s Ryerson University, said that Kodak is “a company stuck in time”. He continued adding that “their history was so important to them, this rich century-old history when they made a lot of amazing things and a lot of money along the way. Now their history has become a liability”.