A CNBC press release shared Kerrisdale Capital’s recent report on Eastman Kodak Company (KODK). The article summarizes the key points of Kerrisdale’s negative report on the commercial printing and imaging company. Kerrisdale wrote a report on the Company since Kodak’s stock has risen by 187%. Kodak recently announced that it would launch a photo-centric cryptocurrency and blockchain-enabled image licensing platform. According to the Kerrisdale Report, titled Gone in a Flash, while cryptocurrencies and blockchain do have the potential to impact many industries and companies, KodakOne will not be one of them.
This isn’t the first time that Kerrisdale’s Chief Investment Officer, Sahm Adrangi, has questioned the true intent of a large corporation. He first became a well-known figure in the financial world by exposing fraudulent Chinese companies through his research.
Sahm Adrangi’s Reasons for the Negative Report on KodakOne
In the case of Kodak, Sahm Adrangi and Kerrisdale state that KodakOne’s plan to utilize blockchain to solve copyright infringement issues is “flat-out silly”. Adrangi’s report states that cryptographically hashing images into blockchain doesn’t protect these images and that photographers will not want to be paid in Kodak coins rather than real money.
The report cites several strong reasons why KodakOne is a flawed concept including:
· Despite claims that this new technology will help protect and fairly pay photographers, it is actually hype designed to appeal to investors.
· Cryptographic hashing will not prove IP provenance and blockchain will not detect or enforce infringement issues.
· This new cryptocurrency is an attempt to capitalize on all of the mania over blockchain and cryptocurrency.
· The Company faces both technical and legal challenges that will render the program unworkable.
Kerrisdale Findings on the Kodak Board Members
The KodakOne report also shares information about suspicious trades by the Company’s board members. According to Adrangi’s report, one day before Kodak announced its new blockchain and cryptocurrency initiative, five board members granted themselves 370,974 restricted stock units. After reviewing this information with experts in security law, including a former SEC Enforcement Division lawyer, the consensus was that Kodak may be at risk for an SEC investigation.
CNBC Press Release on the Report
The CNBC report shares a link to the Eastman Kodak Company Report by Kerrisdale Capital in its press release. The full report is 22 pages long and has explicit details and information on its findings. According to CNBC, there was also a conference call on February 7th to discuss the details of Kerrisdale’s Kodak report further.
Kerrisdale Capital Management, LLC is a research-oriented investment firm that focuses on long-term value investments and event-driven special situations in its research. It is managed by Sahm Adrangi. Adrangi launched the firm in 2009. He holds a degree in economics from Yale University and has worked in various segments of investment banking prior to starting Kerrisdale. Through his company’s research, he seeks to correct misconceptions about stocks such as underfollowed longs and over-hyped shorts that are often misunderstood by the market.
Sahm Adrangi has been featured in numerous publications such as the Wall Street Journal and New York Times. He has also appeared on networks such as Bloomberg and CNBC to share his expertise.