Two things are infinite: the universe and human stupidity; and I'm not sure about the universe. (Albert Einstein)
Wirecard, Hertz, Luckin Coffee, and many other companies made this year even more “special and unforgettable” for all of us. Some of them were involved in the corporate scandal while others in a series of accounting scandals that resulted in the insolvency. But only one company deserves to be granted with the Darwin Awards.
This is a story of the rise and sudden fall of the once one of the most powerful companies in the world - Kodak.
Eastman Kodak, or simply Kodak, was founded in 1888. For much of the 20th century, Kodak was the undisputed leader in the photography industry.
They made photography easier and more accessible to the general public, which was certainly part of their success.
Most importantly, they simplified film processing and made it more accessible to any “ordinary user”.
In 1976, Kodak had 85% of the camera market and 90% of the film market. However, all good things also come to an end.
Starting in 2005, their net income began to decline significantly. The reason was the inability to predict the future of the industry. Failure after failure led the company to bankruptcy in 2012. Fortunately, Kodak came out of bankruptcy and was able to survive to this day.
By fate, Kodak was given another chance to return to Olympus. At the end of July, Trump’s administration announced that it was planning to extend a loan of $765 million to Eastman Kodak, which was struggling to survive after digital cameras displaced its once-ubiquitous camera footage so that the company can produce the ingredients used to fight coronavirus.
As a result, Kodak’s shares surged in 2 days from $2.93 to $33.20. The total value of the company rose from $92 million to $1.5 billion. Unfortunately, things didn’t go as planned.
The Securities and Exchange Commission (SEC) had opened an investigation into Kodak after Senator Elizabeth Warren demanded an investigation into possible insider trading after its CEO Jim Continenza received 1.75 million stock options the day before the announcement of a potential loan from the government.
As a result, it was decided to suspend the provision of a potential loan of $ 765 million to the company.
In light of this development, Trump's trade advisor Peter Navarro called Kodak executives the dumbest: “Based on what I’m seeing, what happened at Kodak was probably the dumbest decisions made by executives in corporate history. You can’t fix ‘stupid.”
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