It’s not very often that a financial analyst issues a negative outlook on a stock. So it is a big deal when one of the best short-selling analysists on Wall Street goes sour on one of the fastest rising stock of the past year. That analyst, Sahm Adrangi recently issued a negative outlook on Kodak.
So why is Sahm Adrangi so negative on Kodak? After all, the stock has risen over 180% in the past few months. Well, it is that very price action, caused by Kodak’s announcement of a partnership with a blockchain imagine licensing platform, that has the analyst flashing a warning sign.
It is not surprising that any stock has risen so quickly after announcing a partnership with a blockchain company. There are many traditional companies that have seen their stock rise after announcing a partnership with anything related to blockchains or cryptocurrencies. What may be concerning Sham Adrangi is that the acceleration of Kodak’s rise may not be justified off of a simple announcement of a blockchain partnership.
Blockchain technology is mostly associated with cryptocurrency. However, this new technology can also be used for other applications such as licensing, smart contracts and proof of work. While the blockchain technology is innovative, it’s influence on a company’s stock price may be overestimated by the investing world.
In his note, Sahm Adrangi believes that Kodak’s announcement may simply be a gimmick to jump on the ICO bandwagon. Additionally, Mr. Adrangi believes that Kodak’s blockchain announcement may also be a smokescreen cover for the company’s recent poor performance and poor fundamentals. The full report on Sahm Adrangi’s negative outlook on Kodak can be view through this link.
Sahm Adrangi is the founder as well as the Chief Investment Officer for Kerrisdale Capital. As the inception of the firm, Mr. Adrangi managed just under $1 million in assets. Today, the firm now has over $150 under management. Mr. Adrangi and his firm as best known for short selling analysis. As of this writing, Kerrisdale Capital has a short position on Kodak.
It is common for hedge fund managers to raise funds to focus on a defined investment plan like residential mortgage-based securities or distressed energy firms. However, Sahm Adrangi has taken a completely different route and has raised 100 million dollars from investors to bet against a stock of a particular company. This new co-investment fund at Kerrisdale is the first of its kind.
In an email to investors Adrangi wrote that the amount of capital raised in such a short timeframe was meaningful and it showed that they had made an impression within the community alternatives. He added that the company they have taken was worth 10 billion dollars and they are going to strive to get people to understand the views they have about it. Mr. Adrangi and Shane Wilson, an analyst at Kerrisdale are working on a video, website, and a report to convince people of their thesis.
Sahm Adrangi is the Chief Investment Officer of Kerrisdale Capital Management. He founded the company in 2009 with under 1 million dollars. Currently, he boasts of managing 150 million dollars. He is known for publishing research on stocks. The analysis is found on Kerrisdale website and Twitter. Apart from publishing research, he has taken a role in some investments such as the Lindsay Corporation. He has also been a speaker at various conferences, including the Value Investing Conference, the Activist Investor Conference, and the Distressed Debt investing Conference.
Sahm Adrangi pursued a Bachelor of Arts in Economics at Yale University. He has worked for several firms before founding Kerrisdale Capital Management. He served as an investment analyst at Longacre Fund Management. His role at the company was to conduct investment research and analysis for the equity and credit fund.
He also worked at Deutsche Bank and later at Chanin Capital Partners. His function at Deutsche Bank was to syndicate and structure high yield bonds, non-investment grade bank debt, debt refinancing, exit financings, and leveraged buy-out financings. At Chanin, he represented preferred equity committees, bondholder committees, debt holders, and creditors of bankrupt companies. He also advised creditors in bankruptcy restructurings.