2 Minute Market Takedown
Twice a week I’ll be looking at the markets to takedown something I think warrants a deeper examination – today I look at why Bitcoin has just popped through US$12,000
In today’s Exponential Investor…
- Melting wax
- What I said in 2018
- Good idea, poor execution
Icarus in Greek mythology was the son of master craftsman Daedalus. You’ve probably heard of the story…
Icarus and his dad were trying to escape Crete, so Daedalus made some wings of wax and feathers, as you do. The idea was to fly away. Simple enough.
But being of wax and feathers, Daedalus warned Icarus not to fly too close to the sun or the sea. Of course Icarus got a little excited about his new-found flying abilities and flew right up close to the sun.
Wax melts, Icarus falls, drowns in the sea.
The legend gives us a tale of hubris and ambition that exceeds talent. Icarus is the story you tell when you’re trying to help someone understand that perhaps sometimes the best route to freedom and glory is the modest one.
Of course, in our world, there are plenty of Icaruses. Those who fly too close to the sun, get too caught up in their new-found “celebrity” and just get all too carried away with themselves.
And yesterday it could be said that one of the oldest names in technology flew too close to the sun. Its wax melt, its feathers burnt today and it’s on a spiral down to the sea, with the distinct possibility it’s going to drown…
The most bonkers ICO of 2018
The other week you will have heard about Kodak’s stock price. I mean, how could you not? The stock was bumbling along at a couple of dollars, the company’s market capitalisation was a hundred million or so, it was Kodak – not really the giant of technology it used to be.
The stock price skyrocketed thousands of per cent higher in a matter of days. The US government was going to give Kodak $765 million to help make ingredients for Covid-19 drugs!
Wahoo! Kodak stockholders rejoice.
Except for one problem. There was furious market trading in Kodak, before this announcement. In fact, the action looked suspiciously like insider trading. We all know, insider trading is illegal.
Yesterday, the government put a hold on that $765 million loan. It wasn’t very happy about the movement in trading before that announcement came out. Now a full investigation is underway, and Kodak might not get a cent of that money.
This could end up being the most fanciful and dramatic stock story of 2020.
However, just over two years ago Kodak found itself as one of the most fanciful and dramatic crypto stories of 2018.
The following is an excerpt from Crypto Profits Extreme – the premium crypto advisory service I head up. I’ve been covering crypto and making recommendations about how to play the market for years now.
And in January 2018 Kodak decided it was going to release a cryptocurrency, KodakCoin.
Sounds bonkers, I know. But in theory maybe not such a bad idea. Here’s what I thought back then,
In 1888, George Eastman he brought to market the world’s first camera, the “Kodak”. In the early days Kodak used the phrase “Kodak Moment” to signify the moment you take a picture that will never be forgotten.
It was pure marketing genius. And helped establish Kodak as one of the world’s great companies.
Kodak would go on to become the world’s dominant camera and film company for more than 100 years. Kodak became as synonymous with cameras as Hoover was to vacuums and Band-Aids to adhesive wound dressings.
Not many people realise, but Kodak also invented the world’s first digital camera. In 1975, Steve Sasson working at Eastman Kodak helped develop it. Then for the next 37 years, Kodak insisted its century-old business of physical film had a future.
And while the world pressed on, developing digital cameras and film-less photography, Kodak refused to change. By the time Kodak realised the folly of its errors, it was too late.
In 2012 Kodak filed for bankruptcy. It was an epic downfall for one of the world’s most iconic companies. And it was completely avoidable. If only its hubris didn’t get in the way of its corporate responsibility. But the phrase “Kodak Moment” has now changed to a very different meaning.
By 2012 a Kodak Moment was the phrase used to define the rise and epic fall of a corporate giant.
But Kodak the brand didn’t completely die away. It continued to live on. And it continues to be heavily involved in the imaging industry. It is and always will be an iconic brand.
However, did you ever think that Kodak would end up launching an initial coin offering (ICO) and developing a cryptocurrency?
Neither did we.
Kodak announced today [10 January 2018] that it will be developing the KodakOne platform and KodakCoin cryptocurrency.
Now upon hearing this news we were flabbergasted. In fact, we were taken aback with horror.
However, even we know you shouldn’t be too quick to judge. And we’re not. In fact, this is actually a very good idea. As Kodak explains on the KodakOne site:
The KODAKOne image rights management platform will create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform. KODAKCoin allows participating photographers to take part in a new economy for photography, receive payment for licensing their work immediately upon sale, and sell their work confidently on a secure blockchain platform
Part of us wonders, why now? After all, blockchain technology isn’t that new. And yes, coming from the poster child of corporate failures it is a little worrying.
But at the same time, if you look past the name and consider what it’s trying to do, it’s a pretty damn good idea. And we think the start of potentially something quite substantial.
Remember, Kodak still comes bearing a powerful brand name. It would be naïve to think it couldn’t resurrect as the platform of choice for photographers to ensure a secure and immutable chain to let them protect their intellectual property and image rights.
As to whether or not the KodakCoin will be worth investing in, well, we’ll look at it and see. If it cuts the mustard and we think it’s worth getting some action in, we’ll tell you. If not, you won’t hear much more about it.
My Crypto Profits Extreme subscribers didn’t hear much more about it from there. The idea is sound. The idea of digital rights management for images is absolutely something that could be effectively managed with cryptocurrency and blockchain technology.
After all, digital imagery is nothing more than data. We can protect, transact and monetise data for creators much more efficiently and effectively using cryptocurrency.
I strongly believe that’s a huge “application layer” area of cryptocurrency yet to fully be explored. I believe that application layer developments in cryptocurrency will actually kick off the next great economic boom in the 2020s – akin to the way in which the “app economy” took the 2000s and 2010s by storm.
However, to get to that level of industry glory, there will be a few that end up as Icarus.
Kodak perhaps defines that better than any company right now.
Kodak was glorious once. And it let hubris get in the way of a flourishing business.
That’s why it failed once in 2012.
It had another crack at glory in 2018 with the KodakCoin. Again, it flew too close to the sun. Where is it today? Nowhere.
Now here it is just a couple of short years later having another crack at it, and judging by the price action in the stock yesterday, this might be the third strike for Kodak.
Maybe 2012 would have been a good time just to divide the assets for good, and let the name live on in legacy of what it did for the camera and film world. Instead, the Kodak name is now tarnished – it’s “scammy” and reeks of suspicious activity and motives.
It is the ultimate Icarus story, and I don’t see it ending well for the company or those who’ve been involved in this latest controversy.Regards,
Editor, Exponential Investor
Ed. note: By the way, Kodak and its crypto in 2018 was during a crazy time in the crypto markets. It wasn’t the first time I’d seen crypto markets like this, in fact in 2013 it was just as crazy. The thing is I believe it will all happen again, soon. And to know what is coming I think you should get a good understanding of why the crypto markets boom and bust time and time again. It’s something I’ve written about several times before here in Exponential Investor including around the time KodakCoin launched.