"After Losing Ground to Generative AI, It Finally..." This Company, Whose Stock Plunged 99%, Files for Bankruptcy Protection - The Asia Business Daily
Shares Plunge About 99% Since 2022 Relisting
Prepackaged Restructuring Agreed with Creditors, Targeted for Completion by Year-End
As competition intensifies amid the proliferation of AI-generated images, Getty Images, a global photo and video content company, plans to file for bankruptcy protection in a U.S. court and pursue a restructuring that will take it private.
According to Reuters on October 12 (local time), Getty Images said it had agreed on restructuring terms with its creditors and investors and planned to begin Chapter 11 bankruptcy protection proceedings in the United States within the next few weeks.
The company plans to pursue a prepackaged bankruptcy, agreeing on a restructuring plan with creditors in advance before seeking court approval. It aims to complete the restructuring by the end of the year and then become a privately held company.
Financial Burden Grows After Shutterstock Merger Falls Through
The decision follows the collapse of its planned merger with rival Shutterstock. Getty Images was already carrying a heavy debt burden, and the rapid spread of AI-generated photos and videos has intensified competition in the traditional stock image and video market, increasing pressure on the company to improve its financial structure.
Once the restructuring is complete, affiliates of the Getty family and Koch Equity Development (KED) will own 100% of the company. These investors have agreed to inject up to $533 million in new equity, equivalent to approximately KRW 715.7 billion.
Creditors have also agreed to adjust the debt. Holders of unsecured claims will extinguish $270 million in claims, equivalent to approximately KRW 364.284 billion, while secured lenders have agreed to lower interest costs and extend maturities. Koch Equity Development will provide up to an additional $143 million, equivalent to approximately KRW 192.049 billion, to support the bankruptcy protection proceedings.
Debt of KRW 2.8 Trillion, but Market Capitalization of Just KRW 27.8 Billion
Getty Images is a global content company that supplies photos and videos in the news, sports, and entertainment sectors. It has provided visual content to major media organizations and businesses, but its financial position has recently deteriorated amid the combined impact of the spread of AI-generated images and its debt burden.
Getty Images' paid editing feature for generative AI images. It allows users to add or remove elements, resize images, and remove backgrounds. Screenshot from the Getty Images website.
View original imageAs of the end of June, Getty Images had total debt of approximately $2.1 billion, equivalent to about KRW 2.8301 trillion. By contrast, its market capitalization was just $20.74 million, or approximately KRW 27.8144 billion, based on the closing price on October 9. Its debt was roughly 100 times its market capitalization.
In 2022, Getty Images returned to the U.S. stock market after 14 years through a merger with a special purpose acquisition company (SPAC), receiving a valuation of approximately $4.8 billion, equivalent to about KRW 6.44 trillion. Since its relisting, however, its share price has plunged about 99%. In August, the company withdrew its previous earnings forecast, saying it was reviewing financing and plans to improve its financial structure. It also appointed Guggenheim Securities as an adviser to explore possible responses. The New York Stock Exchange (NYSE) began delisting proceedings against Getty Images in late September.
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Getty Images said, "We plan to continue operating our core businesses, including supplying photos and videos, as usual during the restructuring period, and to pay our vendors in full according to standard procedures." Reuters described the case as "a prime example of how the spread of AI-generated content and heavy debt burdens are putting pressure on the business models of traditional image providers."
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