Eastman Kodak’s stock dropped 25% on Tuesday after the company warned that without a financial rescue, it might have to cease operations, ending a 133-year journey.
In their earnings announcement, Kodak indicated a lack of “finance or available liquidity” to cover approximately $500 million in upcoming debt obligations.
“These circumstances cast significant doubt on the company’s ability to continue as a viable entity,” Kodak noted in its filing.
The company plans to increase cash flow by suspending payments to its pension plan and aims to clarify how it will address its financial obligations within the week.
Kodak mentioned it doesn’t expect tariffs to significantly affect its business because it produces many of its goods in the US, such as cameras, inks, and films.
“In the second quarter, Kodak faced ongoing challenges to our long-term plans due to an unpredictable business environment,” said Kodak CEO Jim Kontenitsa in a statement.
Kodak, a renowned name in photography, transitioned into the digital age with its first digital camera release in 1975.
However, after filing for bankruptcy in 2012, saddled with $6.75 billion in debt to around 100,000 creditors, the company struggled to adapt to the evolving photography landscape.
Subsequently, Kodak pivoted toward industrial printing and selling branded products, including a Barbie-themed mini photo printer.
In 2020, the company received a $765 million government loan to manufacture essential household drug ingredients, aiming to lessen reliance on foreign suppliers.
This support led to a rapid increase in stock prices, triggering 20 trading circuit breakers that day.
Founded in 1879, the Eastman Kodak Company began when George Eastman patented a plate-coating machine for film production.
In 1888, Eastman launched his first Kodak camera, priced at $25, which revolutionized photography by making it accessible to the masses.
Before this, photography demanded technical know-how and extensive equipment, but now it required merely pressing a button. Eastman famously coined the slogan, “Press the button and we do the rest.”
According to The Economist, by the 1970s, Kodak controlled 90% of the film market and 85% of US camera sales.
Eastman, it’s said, pulled his company name from thin air.
“I made up the name myself. The letter ‘K’ was my favorite—it’s a strong and sharp letter,” he explained.
