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.