This week, Eastman Kodak Company (KODK) announced that it would be issuing its own cryptocurrency and, alongside the issue, would be developing a blockchain based technology that allows users to store, maintain and enforce the rights they hold over the images and data they own.
On the back of the news, the company ran up more than 100% and currently trades for a little over $8.80 a share – a 183% premium to the price at which Kodak shares opened the week.
The blockchain space is on fire right now and we’ve seen a number of companies gain strength on the back of announcements outlining their intentions to position themselves to take advantage of the newest thing in tech.
Kodak is the latest to benefit from doing exactly that and it looks as though the move might serve to reinvigorate a company that has increasingly lagged behind the curve from a technology standpoint over the last decade and that has seen its market capitalization suffer as a result.
There’s another name that’s worth mentioning here, however, outside of Kodak.
The company is Global Blockchain Technologies Corp (BLKCF).
Global Blockchain is an investment management company that was set up to allow retail investors to take a position in the bitcoin and blockchain spaces without having to buy bitcoin or another cryptocurrency directly. The company takes positions in companies in the sector (with the structure and composition of these positions variable depending on the type of deal in question) and then offers its shares as publicly traded to retail investors.
This way, said investors don’t have to worry about buying and storing cryptocurrency (which remains tough for anyone that’s not accustomed to the technology that underpins the sector) and, at the same time, don’t have to miss out on the potential for large-scale reward that this high-growth sector is offering right now.
It’s a neat model but why is Global Blockchain part of the Kodak discussion?
Well, Kodak is issuing its tokens (its cryptocurrency) by way of an initial coin offering, or ICO. This has become a pretty well-known term over the last twelve months but, for anyone that’s not familiar with it, it’s the cryptocurrency space’s answer to an IPO. A company issues tokens in return for operational and development capital and the coins are then listed on an exchange and – theoretically – should rise in value as the company grows and demand for the coins increases. The tokens are usually required as a functional token associated with the company’s operations, which is what drives increased demand as the company grows.
Anyway, ICOs generally include a pre-sale, as part of which a certain number of tokens are issued at a discount to the price at which tokens will subsequently be issued when the primary ICO takes place.
In the case of Kodak, the company offered 8 million of its so-called KodakCoins as part of its ICO pre-sale.
And this is where Global Blockchain comes in – the company has bought all 8 million.
As per this report in the Financial Times, Global Blockchain paid $2 million to pick up all 8 million tokens. Shidan Gouran, president of Global Blockchain, said this about the move:
“The KodakOne ICO is very compelling and fills the need for managing and monetizing digital assets globally. Given the size of the marketplace, the people involved and technology partnership, this has the opportunity to be a very large and active community. Our deep industry roots and relationships have allowed us access this new ICO in short order, one of the first involving a significant brand name issuer that is widely recognized by the public.”
So, in a nutshell, Global Blockchain has aligned itself with Kodak in anticipation of this move serving to revitalize the company going forward.
It also offers retail investors an opportunity to pick up an exposure to the move without having to buy Kodak shares.
As noted, Kodak ran considerably on the back of the news and – in line with this – Global Blockchain also found itself on the right end of some speculative capital inflow; the company is up more than 25% at time of writing on its pre-announcement pricing.
So what happens from here?
Well, this is just one part of Global Blockchain’s portfolio, so the company isn’t going to live or die by the success of Kodak’s efforts to transform itself. With that said, however, Global Blockchain is the first publicly traded player to align itself with Kodak in this venture and, as such, might make for a compelling allocation for anyone looking to pick up an exposure to this development.
The author has no positions in any of the stocks mentioned in this piece.