Kodak caused a major buzz in the photo industry a couple of weeks ago when they announced a cryptocurrency, KodakCoin, using blockchain technology and a new platform to help photographers sell and track the use of their photos. In the initial excitement, the company’s stock nearly tripled overnight. However, initial enthusiasm has turned to uncertainty as details trickle out about how it will actually work.
Here’s how Kodak describes the platform on its website: “Utilizing blockchain technology, the KODAKOne platform provides continual web crawling to monitor and protect the IP of the images registered in the KODAKOne system. Where unlicensed usage of images is detected, the KODAKOne platform can efficiently manage the post-licensing process to reward photographers.”
Artsy reports that the new Blockchain initiative was developed with Wenn Digital, parent company of a photo agency that specializes in paparazzi, Wenn Media. This company tried selling its own cryptocurrency, which Ars Technica claims is the basis for the Kodak coin, but unlike Kodak, there is concern that Wenn Digital is relatively untested.
Artsy reports that the use of the new KodakCoin and KodakOne platform may be limited at first to a small group. Purchase of token points is, at the moment, limited only to accredited investors, which means that according to SEC rules you need to be worth $1 million or more. The websites also note that other details about the currency are unclear, and a disclaimer on the KodakCoin.com website notes that investments in KodakCoin will not be protected under the US Securities Act of 1933, and therefore investors will not be protected under those laws.
Marketplace analysis website Seeking Alpha, in a scathing, deep-reaching analysis, is strongly discouraging its readers from investing in Kodak or the KodakCoin Initial Coin Offering. The author of the article expresses concern that Kodak may be simply riding a wave of enthusiastic investors and simply licensing its name to a relatively small, untested company that would manage it, and that Kodak appears to not be directly involved in the management of the offering.
The article says, “because the adoption of KODAKOne and KODAKCoin does not affect Kodak’s day-to-day operations, it is more likely that their sole purpose is to generate income through the hype around cryptocurrencies and through licensing.”
After a rapid 24-hour rise in value, Kodak stock has remained at between 8 and 11 points for the subsequent 10 days.
