Getty Images Has Three Days to Avoid Default as AI Erodes Its Stock-Photo Empire

For three decades, Getty Images Holdings Inc. (NYSE:GETY) made money selling the world’s pictures. Now, it has just three days to decide whether to pay its bondholders or move closer to a restructuring that could hand control to its lenders. Getty decided not to make interest payments due Sept. 1 on its 9.75% senior unsecured notes due 2027 and 14% notes due 2028, instead invoking 30-day grace periods. The company said it had enough cash to make the payments and meet day-to-day obligations. The grace period, however, expires around Oct. 1. Bloomberg reported Monday that Getty is holding confidential talks with lenders about new financing, including a possible bankruptcy loan, as well as a potential restructuring in which creditors could take control through Chapter 11. Could this once-mighty stock image giant become AI’s first business victim? Getty Stock Is Priced For Distress Equity investors are already pricing in a severe outcome. Getty shares traded Monday at $0.12, down 12% in the session and hitting their lowest level on record. At that price, Getty’s market capitalization stood at about $59 million. The stock has wiped out roughly 93% of its value over the past year. Also, the credit market is sending the same message. Getty has $264.7 million of 14% notes due March 2028 and $5.3 million of 9.75% notes due March 2027. The 2028 notes traded near full value in the spring. Now they trade at about 47 cents on the dollar, according to FINRA data on TradingView, after dropping close to 41 cents in early September. At 47 cents, the notes would yield roughly 90% a year if Getty paid in full. The market is betting it will not. In simple terms, investors expect to get back less than half of what they lent. Earlier this month, Moody’s cut Getty’s corporate rating to Caa3 from Caa1 and its unsecured notes to Ca, one of the lowest grades before default. S&P Global Ratings lowered Getty to CCC and said it would cut the rating to selective default if the interest is not paid within the grace period. Chart: Getty Images 14% Unsecured Bond Due March 2028 Falls To 47 Cents On The Dollar How AI Is Eating The Stock Photo Business For decades, the business model was simple. A marketer needed an image, searched Google, landed on Getty or iStock, and paid a license fee. AI breaks that chain at both ends. First, AI answers now sit at the top of search results, so fewer people click through to stock photo sites. Second, many users no longer need to buy a generic photo, because an AI tool can produce one in seconds. Getty’s numbers show where it hurts. Second-quarter revenue fell 2.5% to $229.1 million. The company blamed weaker traffic and a decline in search engine referrals on iStock, its platform for small businesses and freelancers. Getty stock briefly jumped by as much as 145% in June after signing a deal to feature its photos in ChatGPT. That rally has now fully unwound. Rival Shutterstock Inc. (NYSE:SSTK) shows that the problem extends well beyond a single company. Its shares are down about 80% over the past 12 months. Read Also: AI Nearly Wiped Out This Stock — An OpenAI Deal Just Doubled It In A Day Debt Turned Pressure Into A Crisis AI alone did not push Getty to the edge. Debt raised for a failed merger with Shutterstock, a $110.9 million court payment to former warrant holders and interest costs close to $200 million a year drained its cash. Getty ended June with just $51.6 million. Still, AI shrank the revenue base that was supposed to carry that debt. If Getty files for bankruptcy, it would be among the first well-known companies whose core business was visibly weakened by generative AI before it collapsed. The company has until Oct. 1 to pay its creditors. The clock is running out. Photo: Eric Broder Van Dyke / Shutterstock