the nostalgia market.

Oh yeah!

♪ Got so much style with that silly old smile ♪

♪ I'm gonna get you with a Kodak kiss ♪

Any memorable moment from a child's first steps

to a wedding, was branded a Kodak moment.

But recently a Kodak moment has become, let's say

less nostalgic.

At some point, I think became a crypto company.

And now apparently it's a pharmaceutical company.

In 2020, the American film giant has made headlines

for it's foray into, of all things, pharmaceuticals.

Specifically to treat COVID-19, with the help of

the $765 million U.S. government loan.

And if you think that's kind of odd, you're not alone.

Just so many weird themes of America today, I think are

wrapped into this story which is why it's so fascinating.

[MSNBC News Announcer] $765 million loan for Kodak

to begin producing pharmaceuticals.

Turn another, it's a Trump story.

They're doing something that's a different field.

And it's a field that they've really hired some of

the best people in the world.

Governor Cuomo's involved.

It will create 300 new jobs.

And the story of how Kodak is trying to become

a pharmaceutical company is just as strange as

the announcement itself.

This is how Kodak went from selling nostalgia

to making drugs.

Kodak is a iconic American company.

It once symbolized everything that was great about America.

For the better part of a century, Kodak could be

considered the closest thing to a monopoly without

ever becoming one.

And that was no accident.

Founded in 1888 by George Eastman, Kodak was born

with one mission, to revolutionize the world

of picture taking.

He wanted the camera to be as ubiquitous and as easy

to use as the pencil.

And he adopted a business strategy that says

to the customer, "You push the button and we do the rest".

The rest would turn out to be

an extremely aggressive business strategy.

Look at what happened in the first 40 or 50 years

of the 20th century.

Scale was the way to win in this.

There were a lot of little camera companies and a lot of

photo companies and photofinishing companies that sprang up.

It got into the camera business by buying a whole bunch

of camera companies that not always wanted to get bought.

Typically that doesn't happen by just soft management.

That happens, pretty tough management.

By acquiring these companies Kodak was able

to not only dominate the camera market but the film market

as well.

One of the reasons it became so powerful is

that Eastman understood either sell the cameras cheaply

or give them away because we're gonna make all our money

on film and photo processing.

And it worked on so many levels.

Everything was vertically integrated.

You bought your Kodak camera where you put Kodak film inside

and-

Well if you brought your film in to get it

developed, you brought it to a Kodak store.

Throughout much of the 20th century Kodak

could do no wrong.

Every product launch from cameras like the Brownie

and the Instamatic, to engineering feats in film

like Kodachrome and Ektachrome were a hit.

Even creeping into pop culture.

♪ Momma don't take my Kodachrome away ♪

Kodak didn't just set the tone for the film

and camera industry, it was the film and camera industry.

In the mid-70s, 1976 Kodak owned 95%

of the film market and 85% of the camera market

in the United States.

Employment peaked in the eighties at like 150,000.

This wasn't just a fortune 500 company, this was

a fortune 50 company.

It was a brand that everybody recognized

and it was dominant.

But Kodak didn't just do photography because of

the chemicals used in film, they also developed

blood analyzers, x-rays, pharmaceutical manufacturing

and copiers, just to name a few.

What Kodak didn't know at the time was an invention

by one of its own engineers in 1976, would eventually lead

to the organization's demise.

Kodak engineer Steven Sasson, invented the prototype

that would eventually become the digital camera.

It was a feasibility demonstration.

You saw pictures of it and it was obviously not

a commercial product.

Kodak saw the writing on the wall that their days,

while still decades away were ultimately numbered

as a film business.

I began to look at something Gordon Moore had

come out with just a couple of years before that

and it became known as Moore's Law.

Moore's Law said that the capacity of transistors on

an integrated circuit was gonna double every 18 months.

We were able to conclude in 1978, that by about 2008

consumer electronic imaging oughtta overtake

traditional photography.

At the time Kodak wasn't worried it had a leg up

on the competition and had plenty of time to prepare.

Dealing with major shifts in technology that quickly dated

their research, the transition to digital signaled

the beginning of Kodak's decline.

During the early 80s recognizing this transformation

was coming, Kodak set up an internal school where we sent

chemists and chemical engineers to in-house school

to turn them into electrical engineers.

That turned out to be not very successful.

If you just look at the earning statement of the company

you'd have to say, "What are we doing this for?

Because at this point they're still making money

hand over fist.

There was kind of an ingrained fear

of cannibalizing that core business, of killing

the golden goose.

They were a monopoly in film but they couldn't stop

disruptive technologies.

You know, from coming along and unseating their business.

It's sort of the classic innovator's dilemma problem.

If you have this great cash cow which is your film camera

business and you're one of the dominant players there

you're reluctant to totally disrupt it yourself.

By the time the 90s rolled around, Kodak's push

into digital was in full force.

CEO Georg Fischer, who headed Kodak from 1993 to 1999,

pumped $2 billion into research and development

for digital technology.

They had this event in San Francisco.

It was March 28th, 1995.

They call it the big event.

The Chicago Tribune, I remember they had their headline

was "The Big Gamble".

And it was Fischer's big announcement that you know,

Kodak was moving you know, full steam ahead to digital.

And each attempt was a flop whether it was

the massively overpriced DCS 100, the photo CD that could

hold up to 25 images, which was quickly outpaced

by the growing capacity of hard drives.

And the DC 20, an incredibly cheap camera

that everyone agreed took awful pictures.

The disc camera was a disaster.

They called it the adventure of the incredibly

shrinking negative.

And it was so small that the images were horrible.

The 90s were also a time when Kodak

started spinning off its other businesses

to pay down its debt.

Selling its entire office imaging business, its digital

printer and copier division and turning

its chemical division into Eastman Chemical.

In 2003, under new CEO Antonio Pérez, who joined

from Hewlett Packard, the company once again made the claim

that Kodak would become the leader in digital cameras.

Kodak is back!

They're taking this digital thing to a level on dreamed of.

They learned early on that the devices weren't the thing.

It was what the devices allowed you to do.

It was the fall on business, all the ancillary stuff

is where they made the money.

They didn't have the right kinda culture to sell cameras,

digital cameras in a frenetic you know, low barrier to entry

market and to beat back everybody else.

Compared with cameras that require film

margins related to the use of digital cameras

are a disaster.

Film generates a profit of as much as 70 cents

on the dollar.

Digital imaging might make a nickel.

It's like that old joke about like we're losing

money on every unit we make but we'll make it up on volume.

In 1987, the company employed 145,000 people

at its enormous facility in Rochester.

20 years later in 2020, that number has fallen all the way

down to 4,900 and it keeps on shrinking.

I would like to take this time to answer a few important

questions about Kodak.

In light of our decision to file for reorganization.

With the failure to successfully pivot

to digital complete, on January 19th, 2012 Kodak filed

for bankruptcy.

This once great company files for bankruptcy

and now they're trying to build with whatever you can.

So you get Jim Continenza comes in as the chairman at

that point, is sort of their standard barer.

While this was the end of Kodak as mainly

a film business Kodak emerged from bankruptcy in 2013

and started the first of its many pivots.

Well, some investors are crazy about cryptocurrencies

right now.

Kodak is launching its own cryptocurrency KodakCoin.

The cryptocurrency system will allow photographers

to register work that they can license and then

receive payment.

It was coming at a time where it seemed like everybody

was announcing a coin as a way to raise a bunch of money

because there was so much mania.

And so you have Kodak, which is a publicly traded company.

A lot of the crypto coin ideas didn't have a public company

to latch on to.

So you attach this idea to a public company and all of

a sudden, the stock price soars.

In one day of trading shares soared 120%.

Going from $3.10 to $10, but it wouldn't last.

It was widely lampooned I think by the press.

I think the BBC called it one of the worst ideas

to come out of CS or something like that at the time.

It was during legit crypto mania.

From the peak of the announcement of KodakCoin

until early 2020, Kodak's stock price fell from $36.88 cents

to around $2.70 cents.

Until-

Shares of the company soared yesterday after news that

the U.S. government awarded the firm $765 million in loans.

They just need to become a cannabis company

and a meat-free company and then they've really got

the trifecta of all things,

millennial and gen Z. Don't forget electric cars.

Most people heard about the Kodak loan

on you know, July 28th.

We have president Trump himself talking about

the $765 million loan, we have Peter Navarro,

the trade representative, going on TV talking about it

and the governor of New York, Andrew Cuomo, thanking

the president for it.

That all of a sudden wakes everybody up in the world

to this.

And just like with the announcement of KodakCoin-

The share price goes crazy, it tops out at $60 when it had

been trading around $3 for months and months.

For a moment, it was actually a feel good story

a once great American company, having its second act.

There's a ton of media attention on it, everybody's asking

why this company, can Kodak really do it?

Why are there all these strange things about

how they handled the announcement?

And then suddenly you have everybody investigating.

Regulators look into improprieties allegations

of insider trading.

[MSNBC News Announcer] The trading volume for Kodak

shot up right before the deal.