Lead Story…. A bit short on time writing this between the long weekend and the fact that it was my birthday on Sunday so I wanted to focus on something a little outside the box – the most brilliant strategy in corporate America today, possiblye in history. So what is it? Take any moribund company or fly-by-night penny stock that trades publicly and simply add in a crypto currency side business or, if you can’t come up with an idea that fits there just add some variation of “blockchain” or “crypto” to the company’s name. Then issue a press release, sit back and watch the valuation soar in increments of 100% while momentum chasers and johnny-come-lately trend followers pile in. Keep in mind that this requires no actual experience in crypto-assets, no balance sheet and no substantive plans to implement anything. Sounds great, right? Thus far, it’s been tried by a hamburger chain, an iced tea maker, and numerous fly-by-night Chinese and Russian companies that don’t appear to actually do anything and I’m sure are just as sketchy as they sound – and the results have been stellar to say the least. However, today I want to focus on the largest and most well known company to jump head first into the space – Kodak.
For those of you reading this who are under the age of 30, Eastman Kodak (also known simply as Kodak) is an American technology company that produces imaging products mostly based on photography. It was founded in the late 1800s and was once one of the world’s leading companies but plunged in value due to management completely missing the rise of digital photography. Kodak bottomed out when it filed for Chapter 11 bankruptcy protection in 2012 and has been a shell of itself ever since. Quick side note: when I told Mrs. Links about this story her response was “they are still in business?” and I can assure you she is not alone. Kodak’s stock peaked at around $37 per share after it emerged from bankruptcy and had been in decline ever since, flat-lining around $3 per share for much of the past year. Then Kodak showed up at CES in Las Vegas last week with a plan to turn things around by going full bore into cryptocurrency with a two pronged approach.
Today Kodak and WENN Digital, in a licensing partnership, announced the launch of the KODAKOne image rights management platform and KODAKCoin, a photo-centric cryptocurrency to empower photographers and agencies to take greater control in image rights management.
Utilizing blockchain technology, the KODAKOne 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.
Next, they released a branded Bitcoin mining machine to rent to aspiring Bitcoin prospectors:
Kodak, the once iconic camera company, is licensing its brand to Spotlite, which builds computers designed to mine bitcoin, for a new line of bitcoin-mining machines that they plan to rent to the public for thousands of dollars. Although just how associated Kodak wants to be with the device is an open question.
On the flyer, the companies said they’d ask prospective customers to sign a two-year deal and pay $3,400 up front to rent the mining machines, which are used to support the bitcoin network and create new coins. As part of the agreement, Spotlite would gets to keep half of all proceeds the machines generate by mining bitcoin.
Of course, the stock almost instantly surged to $9 per share because why wouldn’t an about face to a combination of an ICO and a Bitcoin sharecropping scheme result in the complete resurrection of a dying 135+ year old photography company? I suppose that the positive here is that Kodak does still have some legitimate business lines unlike some of the other highly questionable companies that have tried this, meaning that buyers of the stock still have some legitimate business to hang their hats on if (when) this all goes south. Still, it’s more than a bit odd that the best way to earn out-sized returns in the stock market today is press release roulette – predict which dying company will co-opt cryptocurrency next, buy their stock and then sit back and wait for the press release that will send shares soaring. Or, if you don’t have anything better to do, watch all day for news to hit the wire about the latest crypto scheme and jump in with both feet.
Now, I’m not one to just sit back and watch though so I’ve decided to re-brand this blog as Landmark Blockchain CryptoLinks effective immediately. The blog was worth absolutely nothing yesterday (it actually has a negative value if you count the premium subscription to WordPress and the hourly value of the time it takes me to write all with absolutely no revenue stream to speak of). However, armed with a new name and our pending ICO where you will be able to purchase virtual Landmark tokens that can be used in exchange for absolutely nothing whatsoever, I’m fairly confident that I can raise several hundred million dollars in no time at all and finally be able to purchase the tropical island that I’ve had my eyes on. What a time to be alive.
Catalyst: How the shale bust of 2014 helped lead to the economic boom of 2017.
Lack of Ammo: Federal Reserve officials are increasingly concerned about their lack of ability to cut rates by a meaningful amount when the next recession comes which could potentially lead to a scrapping of the current 2% inflation target.
Hard Time, No Problem: In a scenario that was unimaginable just a few short years ago, the labor pool has gotten so tight that prison time is becoming less of a hiring hurdle.
The Coming Wave: A quarter of the US population will be in the elder years within the coming decade, which, coupled with pressure to cut costs and new technologies, is resulting in boosted demand for medical office properties.
Mixed Bag: Owning is still more affordable than renting in 54% of major US markets. However, renting is more affordable than buying in 76% of counties that have a population of 1 million or more.
In the Money: US home equity is now at a record level and home owners are tapping into it to pay off other more expensive debt as well as for renovations. However, they are also pulling out cash to invest in the stock market, other real estate or riskier investment like cryptocurrencies – which is concerning.
Supply and Demand: Don’t tell the NIMBYs but Seattle rental pricing is dropping substantially as a wave of new units come to market. See Also: Denver’s Lower Income Voucher Equity Program will help lower-income tenants pay the difference between what they can afford and the market rent as more luxury units come online.
Please Make it Stop: How robo-callers outwitted the government and completely wrecked the useless Do Not Call List. Also, if any of you happen to know Mike Jones from Laguna Beach mentioned in the first paragraph of this article, please punch him in the face for me.
Subsidized: The secret lives of students who take advantage of “free” electricity and internet access in their dorm rooms to mine Bitcoin.
Off a Cliff: Wall Street banks have lost $27 billion in trading revenue over the past five years. In the meantime, crypto brokerages are charging 3% fees. I bet you can’t guess what is going to happen next.
Chart of the Day
The Federal Reserve cuts rates an average of 500 basis points in a recession but has nowhere near that type of capacity at the current time.
Source: Larry Summers
In Soviet Russia: In possibly the most Russian story in history, a drunk man used a stolen tank to break into a liquor store to steal some booze – which was shockingly not vodka.
Gotta Hear Both Sides: A woman in Arizona fired shots at her husband because he wouldn’t listen to her while he was on the can.
PLEASE MAKE IT STOP: Men’s skirts are becoming a thing in the fashion world and I don’t think that I want to live anymore.
Landmark Links – A candid look at the economy, real estate, and other things sometimes related.
Visit us at Landmarkcapitaladvisors.com