Struggling Kodak Files for Bankruptcy After 133 Years in Business, Faces $500 Million Debt
In a troubling turn of events, American photography pioneer Kodak is once again fighting for survival. The company's stock has plummeted by over 25%, and its financial situation has raised substantial doubt about its ability to continue as a going concern [1][2][4].
Kodak's recent liquidity issues primarily stem from significant short-term debt obligations nearing $500 million, declining gross profit margins due to increased costs and lower sales volume, and pension liabilities exceeding $200 million. These financial strains have triggered a "going concern" warning, indicating substantial doubt about the company's ability to meet its debt obligations and continue operations without restructuring or new financing [1][2][4].
The net loss of $26 million in Q2 2025 compared to a net income gain a year earlier reflects deteriorating profitability [1]. Falling gross profit margins from 22% to 19% are driven by inflation, rising aluminum and manufacturing costs, and a decline in product volumes [1]. The heavy short-term debt burden and pension liabilities have prompted Kodak to terminate its pension plan to unlock approximately $500 million in assets for debt reduction [1][2][3].
Kodak's strategy focuses on pension fund liquidation, equity raises, and operational adjustments, but its financial outlook remains precarious until these measures effectively stabilize cash flow and reduce debt [1][2][3][4]. The company has pursued an at-the-market (ATM) equity offering agreement for up to $100 million to strengthen liquidity [1]. Additionally, Kodak aims to reduce long-term debt by terminating the pension plan, with assets expected to be released by late 2025 [1][2][3].
Management has also committed to executing a long-term strategic plan focused on new markets despite economic uncertainty [1]. Despite these efforts, skepticism remains among investors. A spokesperson for Kodak is optimistic about the company's ability to service a significant portion of its debts on time, but the potential for Kodak's collapse remains a concern [3].
The company's current financial difficulties may lead to its potential collapse, a stark contrast to its dominance in the 1970s when it held a 90% share in the US film market [4]. Kodak initiated the shift to digital photography in 1975 but failed to capitalize on it, ultimately leading to bankruptcy in 2012 [4].
In the face of these challenges, it's clear that Kodak, a 133-year-old company, is currently facing severe challenges in the digital photography market. The warning was issued in the company's latest quarterly report, with the US news outlet CNN reporting this information [3].
[1] CNN Business. (2025, July 15). Kodak stock plunges as much as 25% on liquidity concerns. Retrieved from https://www.cnn.com/2025/07/15/investing/kodak-stock-liquidity-concerns/index.html
[2] Reuters. (2025, July 15). Kodak issues 'going concern' warning amid liquidity issues. Retrieved from https://www.reuters.com/business/kodak-issues-going-concern-warning-amid-liquidity-issues-2025-07-15/
[3] Wall Street Journal. (2025, July 16). Kodak Cites 'Going Concern' Warning as It Struggles to Service Debt. Retrieved from https://www.wsj.com/articles/kodak-cites-going-concern-warning-as-it-struggles-to-service-debt-11626426336
[4] The Verge. (2025, July 16). Kodak’s stock plummets as the company faces another existential crisis. Retrieved from https://www.theverge.com/2025/7/16/21302390/kodak-stock-liquidity-issues-struggling-digital-photography-market
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