Kodak cryptocurrency lifts stock 130%: Are established companies hindering the blockchain industry?
Kodak’s move has widely been regarded as a form of brand revitalization for the company, which had been languishing in the age of digital photography and even filed for Chapter 11 bankruptcy protection in 2012. Kodak chief executive Jeff Clarke soar because of it.
Today, once-giant photography company Kodak announced it would be releasing its own cryptocurrency ‘KodakCoin’ to function within the company’s own KodakOne blockchain platform, reports The Verge. On announcement, the company’s stock price rose 130%.
The platform will be focused on digital rights management on the blockchain, helping photographers license their work and receive payment “immediately upon sale” through the currency. The platform will also include post-licensing services and online image trawling to ensure photographers are being paid for use of their work.
Kodak’s move has widely been regarded as a form of brand revitalisation for the company, which had been languishing in the age of digital photography and even filed for Chapter 11 bankruptcy protection in 2012. Kodak chief executive Jeff Clarke said in a statement while ‘blockchain’ and ‘cryptocurrency’ “hot buzzwords” for many in the tech space, “these buzzwords are the keys to solving what felt like an unsolvable problem”.
BREAKING: Kodak announces #ICO, stock jumps 44%. Are ICOs the new brand revival? We going to see Blockbuster, or Blackberry coin next? How to: #1: Announce ICO #2: Have stock explode. #3: Profit on ico launch. #4: Possibly revive relevancy in decentralized world?#bitcoin pic.twitter.com/UeXfRiVGZw — Erick Miller (@erick_miller) January 9, 2018
However, Kodak’s move isn’t the first example of companies latching on to the blockchain craze to boost both recognition and share price. The stock price of Long Island Ice Tea Corp, an ice tea production company, soared 500% after it announced a pivot to blockchain and a name change to “Long Blockchain”.
Similarly, a Chinese fruit juice company saw its price rise 200% after changing its name to “Future FinTech”, leading traders to speculate the company would be getting into blockchain tech.
Is it a “cash grab”?
Samuel Brooks believes many of these moves are “cheap tricks” and “cash grabs” that detract from legitimate companies trying to gain recognition and funding.
“Highly volatile speculative markets attract a lot of the wrong sorts of players, and there are clearly some examples of people trading off the hype to pump their share price,” he says.
“Blockchain tech is all about how it can provide long-term value, so people chasing short-term gains are hurting the industry.”
However, Brooks stresses these moves should be judged on a case-by-case basis; he sees Kodak’s announcement as a positive and constructive entry into the blockchain space. Recent comments from Facebook founder Mark Zuckerberg suggest the social network could also be considering blockchain solutions, which Brooks welcomes.
While cryptocurrency markets are regularly labelled speculative bubbles, Brooks says the underlying blockchain technology certainly isn’t a bubble. That doesn’t mean companies are not still struggling to work out the actual value of the fundamental technology.
“In terms of global companies investigating the blockchain space, I think it depends on the legitimacy of each use case,” he says.
“For Kodak, we know that IP rights management is broken, and we know that blockchain tech can theoretically help solve this. There are a few players already looking at this sort of thing, so it’s a matter of Kodak bringing something unique to the table.”
Locally, Brooks hasn’t seen any indication of listed Australian companies going down a similar path, but highlights the difference between changing tack entirely to focus on blockchain, and running a pilot or testing integration of the technology within a business.
“I think at least all companies should be aware of blockchain technology and have a plan to strategically integrate it,” he says.
“More legitimate companies using it is helpful, and will faster create a global understanding of the good the technology can do.”