Eastman Kodak, formerly the well known camera and photo company has recently announced to new business ventures, KODAKOne and KODAKCoin. These two new block-chain managed services have caused the company’s perceived value to Skyrocket more than 187%. While many investors are very optimistic about these new services, not everyone shares the same philosophy.
While it is clear that many block-chain and cryptocurrency companies have develop very useful, highly profitable services, the block-chain alone is not enough to justify a venture. Recently in an interview, Sahm Adrangi of Kerrisdale Capital issues warning to their clients as well as outside investors about the inherent risks of these new services.
Sahm Adrangi’s approach is based on more than just a skepticism about crypto. He has pointed out that there are many other warning signs and red flags associated with the recent happenings with Eastman Kodak. He was able to share a few bits and pieces later in this interview.
Most notably, KODAKOne is not necessarily an internal product. This is not something that the company has been working on for some time, is that it is a product that is created by an outside company under the KODAK name. WENN Digital Inc. is the lead developer of KODAKOne, with Appcoin Innovations Inc. serving as the strategic advisor for KODAKCoin ICO. Sahm Adrangi noted that these are companies they do not have a long track record like Kodak, and are seen as having “highly dubious backgrounds.”
Another major concern is the Kodak Board of directors granting for themselves restricted company stock the day before announcing KODAKOne. This indicates that the board wants to retain as much for themselves as possible, leaving less for shareholders. This suspicious action also may draw the attention of SEC investigation.
All together it is safe to say that if any of these partnered companies had a product that was worthwhile they would not need the Kodak brand name. Sahm Adrangi noted that it seems like there was very little for Kodak to bring to the partnership other than credibility and a good name. It’s clear to him that this strategic partnership does not boost the value of the company and cannot save them from declining revenues.