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The company that invented digital photography, went bankrupt, got handed a dodgy government loan deal that smelled like insider trading, and is now quietly printing cash as a chemical company; and somehow also sells streetwear in South Korea. You literally cannot make this up.
I do a weekly deep dive on the QAV America podcast with my co-host Tony Kynaston, where we run stocks through a checklist-based value investing system Tony developed over 25 years. This week's "Pulled Pork" was Eastman Kodak ($KODK): and what looked like a boring old brand name on the surface turned out to be one of the more fascinating turnaround stories I've come across in years. I added it to my portfolio.
# The Company That Invented the Future, Then Missed It
Let's start at the beginning. George Eastman founded the Eastman Dry Plate Company on January 1st, 1881 in Rochester, New York with his partner Henry Strong, a guy who'd previously been running his family's buggy whip manufacturing business. (Warren Buffett literally uses "buggy whip company" as shorthand for businesses that fail to adapt to technological change. Make of that what you will.)
By the late 1800s, Kodak had patented the roll film camera, invented a genius full-service business model: you buy the camera pre-loaded with 100 exposures, shoot your pics, mail the whole thing back to Rochester with a $10 fee, and they mail you back the prints, the negatives, and a freshly loaded camera; and coined the slogan "You press the button, we do the rest." In 1900 they released the Brownie, a camera marketed to children. I would've guessed the 1950s. It was 1900. Absolute unit of a company.
By the early 20th century Eastman had essentially built a small city in Rochester, pioneering what they called "welfare capitalism": profit sharing, life insurance, disability benefits, and selling company stock to employees below market value. His motive wasn't entirely altruistic; he was terrified of unions and figured if you paid people well and looked after them, they wouldn't organise. Revolutionary concept, apparently.
Oh, and the name "Kodak"? Means absolutely nothing. Eastman liked the letter K, thought it was sharp and distinctive, and literally invented the word using a set of anagram tiles. Early-stage branding genius or unhinged Scrabble enthusiast? I'll let you decide.
# They Invented Digital Photography and Then Kind Of Forgot
Here's the gut punch of the Kodak story. In the mid-1970s, one of their own researchers, a physicist in the Kodak Research Labs, became convinced digital imaging would eventually replace photographic film and quietly set up a small lab to investigate CCD image sensor technology. The same technology that's now in every iPhone. In 1979, another Kodak employee wrote an internal report predicting a complete shift to digital photography would occur by 2010. They were basically right on the money.
And yet. Corporate culture, the Innovator's Dilemma, whatever you want to call it: the executives couldn't pull the trigger on cannibalising their own highly profitable film business. By 2005, Kodak had actually clawed their way to number one in US digital camera sales at $5.7 billion a year. But the margins were terrible compared to film, Asian competitors like Canon, Sony, and Nikon were eating their lunch, and by 2010 they'd fallen to seventh place with a 7% market share.
In 2012, they went bankrupt. Legacy shareholders got wiped out. The company had to completely reinvent itself.
# Enter George Costanza (Not His Real Name)
The CEO today is a guy called Jim Continenza, which I kept writing as "Costanza" in all my notes, a restructuring specialist who'd actually joined the board before the bankruptcy and helped navigate the whole mess. He ended up as CEO and has spent the last five years implementing what he calls the "One Kodak" strategy: eliminating corporate silos, paying down debt, monetising their massive patent portfolio and real estate holdings.
On his first day as CEO, he gathered more than a thousand employees in the company's theatre and asked them a simple question: what does Kodak do? Nobody could answer. He discovered the company had become very good at making products nobody wanted.
I've run marketing consulting workshops where I've asked exactly the same question of founders and CEOs, not "what do you make" but "what problem do you solve better than anyone else?", and almost nobody can answer it. It's more common than you'd think. Steve Jobs did the same thing at Apple in 1997: walked in, looked at everything they were making that nobody wanted, and started cutting. Continenza did the same at Kodak.
His philosophy: when you're losing money, you've got two choices. You can spend twelve years slowly running out of money because you're too scared to invest, or you invest that money, maybe die sooner, but at least you have a fighting chance. He took the latter.
# The Trump Loan, The Insider Trading, and the Coded Texts
Okay, so this is the bit that makes the story genuinely entertaining. In July 2020, the Trump administration announced a $765 million government loan from the Development Finance Corporation for Kodak to manufacture pharmaceutical precursors, basically helping rebuild the US national stockpile depleted by COVID and reduce reliance on Chinese and Indian supply chains. The rationale was that Kodak already had the chemical reactors and high-quality water systems to manufacture this stuff.
Within two days of the announcement, the stock went from $2.15 to $60. A 2,189% increase.
The New York Times then reported that one day before the White House announcement, CEO Jim Continenza had been granted 1.75 million stock options at the $2.15 strike price, some of which he could exercise immediately. Elizabeth Warren went absolutely feral about it. The SEC launched an investigation. Class action lawsuits followed. Continenza and other executives testified before Congress.
All of the Kodak executives were ultimately cleared.
The two people who did go down were a guy called Andrew Stiles, VP at a pharmaceutical supply chain company called Phlow that was working with Kodak, who allegedly learned about the loan and tipped off his cousin. The investigators found coded text messages between them, including one where the cousin referred to the loan as "the film we sent off a few weeks ago to get developed."
I cannot stress enough how stupid that is. As Tony pointed out, if you're going to do insider trading, you don't put it in a text message. You go play golf and have a quiet chat on the ninth green.
The loan itself never came through, the SEC put it on hold, but Kodak went and built out the pharmaceutical division anyway. They now produce laboratory reagents including phosphate buffered saline and water for injection. Small fraction of revenue for now, but potentially significant given the current US political obsession with pharmaceutical supply chain independence.
# What Kodak Actually Is Today
Most people think Kodak is either dead or still somehow selling little yellow film boxes. Neither is really true.
Three business segments:
* **Print** (\~67% of revenue, \~$715M in FY2025): High-speed inkjet presses and offset printing plates for commercial printers. Classic razor-and-blade model: they sell the machine, then sell the recurring aluminium plates. Not sexy, but consistent.
* **Advanced Materials & Chemicals** (\~growing fast): This is where the profit actually lives. Industrial film, motion picture film (there's a genuine resurgence driven by directors like Tarantino, Scorsese, and Christopher Nolan demanding 70mm film), electrically conductive inks for electronics, and IP licensing from 140 years of chemical patents. In 2025, this segment saw a 17% revenue increase and generated the vast majority of operational profit: about $39M of their $62M EBITDA.
* **Brand licensing** (\~$23M, tiny but interesting): They license the Kodak name for everything from digital cameras (made by someone else) to eyewear (Luxottica has a perpetual worldwide license) to wall paint to solar panels to flashlights. And, I was genuinely gobsmacked by this, there are 123 physical Kodak-branded retail clothing stores in South Korea selling retro streetwear, with expansion into Hong Kong, Taiwan, and Japan. It's a small revenue line but it's essentially pure margin and requires nothing from the company operationally.
# The Billion Dollar Pension Trick
The most recent chapter of this story is genuinely brilliant. Kodak had a defined benefit pension plan, the Kodak Retirement Income Plan (KRIP), that had somehow become massively overfunded relative to its obligations. Late in 2025 they terminated the plan, settled all obligations to participants through annuities, paid a federal excise tax of $153 million on the surplus, and walked away with a net benefit of $870 million in cash and investment assets.
They immediately used $312 million to prepay their term loans, reducing the principal balance from $512 million to just $200 million. That debt reduction alone saves roughly $40 million annually in interest payments: which explains most of the jump from $26M EBITDA in the prior year to $62M in FY2025.
For the first time since emerging from bankruptcy in 2012, Kodak has meaningful liquidity: $337 million in unrestricted cash at end of 2025, up from $201 million a year earlier.
# The Numbers
* **QAV Score:** 0.49 (high; we don't see them up there often)
* **QAV Quality Score:** 77.78% (above our \~75% threshold)
* **Price to Operating Cash Flow:** 1.59 (we look for under 7; this is exceptional)
* **F-Score (Piotroski):** 7 (we score above 4.5; 7 indicates solid financial health)
* **Quality Rank (Stockopedia):** 66 (above threshold of 60)
* **Stock Rank (Stockopedia):** 75 (below our threshold of 90; didn't score for this)
* **Share price at time of analysis:** \~$7.83
* **Book value per share:** $7.31 (price slightly above book, but under book+30% at $9.51)
* **Operational EBITDA FY2025:** $62M (up 138% from $26M prior year)
* **Revenue (Print segment FY2025):** \~$715M
* **Debt (post pension reversion):** \~$200M term loan (down from $512M)
* **Cash:** $337M unrestricted
* **GAAP net loss FY2025:** $128M (driven by $153M pension excise tax and $7M debt extinguishment: both one-time, non-operational items)
* **Market Cap:** Small cap
# Why It's Interesting
The obvious bull case is that Continenza has done exactly what you want a turnaround CEO to do: strip out the complexity, identify what the company is actually good at, pay down the debt, and put the business on a sustainable footing. The pension reversion wasn't luck: it was the result of years of disciplined management creating the conditions where that surplus could be captured. And the $40M annual interest saving drops almost entirely to the bottom line.
The less obvious bull case is the Advanced Materials & Chemicals segment. Kodak has 140 years of accumulated knowledge in high-precision chemical coating and manufacturing processes. The motion picture film resurgence is real: major directors are actively fighting to keep film alive, and Kodak is one of very few companies in the world that can supply it. The pharmaceutical precursor play is early but politically well-timed; onshoring pharmaceutical supply chains has bipartisan support in the US right now, and Kodak already has the infrastructure.
And then there's the plain-vanilla value case: at a price-to-operating-cash-flow of 1.59, even if this company never grows another dollar, you're buying a business generating real cash at a very cheap price. The brand licensing alone, 123 stores in South Korea selling retro hoodies, is basically free money at this point.
# The Risks
1. Commercial printing is a structurally declining industry. Digital communications keep eating into demand for physical print. Kodak's print segment is the largest revenue driver and it's not exactly a growth story.
2. The pharmaceutical pivot is still largely aspirational. Revenue is tiny. Regulatory hurdles for pharmaceutical manufacturing are significant. The reputational damage from the 2020 loan saga hasn't completely disappeared.
3. Environmental liabilities from over a century of industrial operations in Rochester are real. They've committed $45M to a cleanup trust, but total costs could hit $100M or more, with Kodak on the hook for 50% of anything above that.
Disclaimer: DYOR. I'm not an expert in photography, but I have been known to take one or two. BTW, Mother, "the film" is ready to "be developed", hint hint.