Good for Kodak for responding quickly AND being transparent about the numbers involved.
FWIW, discussions about Kodak's decline have been going on for years. This thread is from 2016: https://news.ycombinator.com/item?id=12111597
FWIW, discussions about Kodak's decline have been going on for years. This thread is from 2016: https://news.ycombinator.com/item?id=12111597
As a result, these conditions raise substantial doubt about the Company’s ability to continue as a going concern as of the issuance date of the Company’s second quarter financials.
https://www.kodak.com/en/company/press-release/q2-2025-finan...
As Walter Bagehot said "Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone..."
https://pcaobus.org/oversight/standards/auditing-standards/d...
https://www.sec.gov/edgar/search/#/q=%2522these%2520conditio...
When the story got attention yesterday I recognized that phrase as the standard boilerplate language securities lawyers warn public companies to include in filings anytime it looks possible that they might not be able to fully meet all their obligations on time. It's a CYA to prevent (or reduce the cost of) investor lawsuits if things go badly. It's not uncommon to see this phrase sometimes pop-up even in filings of companies who are pretty obviously going to be fine, so it doesn't mean much because it covers a huge range of conditions.
I'm sure it's already appeared in Kokak's filings in recent years. The only surprising thing is that some media outlet decided to headline it as click-bait and it worked well enough a lot of people not familiar with the phrase and its lack of significance saw it. Nice of Kodak to at least issue a press release but unfortunate the click-bait got that much attention. It must have been a slow news day.
Even a cursory glance at Kodak's financials shows enough revenue that creditors certainly aren't going to force the company into liquidation in the foreseeable future. Instead, the company will renegotiate and/or refinance the obligations - which is what usually happens in these situations. When there's significant revenue from ongoing operations, even if it's somewhat unprofitable, it's usually in everyone's interest to keep the company operating in the hope it can be turned around. In fact, scary sounding statements like that are sometimes intentionally issued by the company as part of the debt renegotiation process (although it doesn't appear that's the case here as things aren't that serious). Basically, the implied threat from the company to creditors is "renegotiate debt terms or you may get much less or nothing."
Oddly it didn't appear prior to the 2012 Chapter 11.
When I look at the company's follow up assertion characterizing the required disclosure as not direful, the first thing I notice is what is not there: they do not deny that the firm is likely to be acquired.
Why else would people be trying to hurt their stock other than to make an opportunity for someone to swoop in and make a killing?
Then they can close out their positions at a profit regardless of whether the underlying business is any good. In fact, it's kind of better to pick a poor business for this since it's less likely the stock will spike organically for some reason.
But this is a film/camera company so I guess I have no skin in this game anyway. Just giving a bit of scrutiny based on other experiences like this.
(I also worked for Kodak for a brief time supporting a "dark line" where they packaged photosensitive products. A kick in the ass, great fun, very disciplined, and writing code which ran machinery in a black box!)