A recent CNBC report shared Sahm Adrangi’s position on the Eastman Kodak Company. Adrangi’s private investment manager, Kerrisdale Capital, has taken a short position on Kodak stock.
Kodak share prices have risen 187% since the company announced their future plans, which include a partnership with WENN Digital to launch a blockchain-enabled image licensing platform, and starting a photo-centric cryptocurrency called KODAKCoin. When the partnership and cryptocurrency were first shared at the 2018 International Consumer Electronics Show in Las Vegas, the price of Kodak shares tripled in two days, and the company’s valuation increased to $565 million.
KODAKCoin will mainly be used for payments in photo licensing deals, and the Initial Coin Offering (ICO) was originally planned for January 31, 2018, but has since been delayed. An ICO is similar to an IPO but instead of a company going public, the cryptocurrency becomes available for sale. The new date for the KODAKCoin release has yet to be announced.
Kerrisdale Capital has taken a short position on Kodak stocks, meaning that the company will make money if the prices fall. Adrangi doesn’t believe the plans for either the image licensing platform or KodakCoin will be successful. The CNBC article reports that Adrangi sees the announcement as “a hollow attempt to chase the ICO craze that do nothing to offset Kodak’s poor fundamentals and unsustainable capital structure.”
For more on Adrangi’s position, you can read his full report titled “Eastman Kodak Company” with the subheading “Gone in a Flash.” In it, Adrangi explains “KODAKCoin is not a serious attempt to apply new technology to a real problem – it’s a last-ditch stock promotion gambit for a company hurtling towards bankruptcy.” He continues to say that “KODAKOne is a flawed concept that will never deliver promised benefits.” The company claims that they will enforce copyright for photographers to help them make money, but doesn’t share the details on how they will be able to do so in a new, and better, way.
Kerrisdale Capital Management is a research-oriented investment firm located in New York, New York. Previous recent investments with a short position by the company include Prothena Corp. PLC, ViaSat Inc., Pulse Biosciences, Inc., Northern Dynasty Minerals Ltd., and Straight Path Communications Inc.
Kerrisdale Capital Management was founded in 2009 by Sahm Adrangi, who currently acts as the Chief Investment Officer. Although the company was started with only $1 million, Kerrisdale Capital has grown and currently manages $150 million. Investors in the company will benefit if the Kodak share prices fall.