In early February, successful investment manager, Sahm Adrangi, issued a negative report on the Eastman Kodak Company. The report was issued by Kerrisdale Capital, a private investment firm of which Sahm Adrangi is the Chief Investment Officer. Within the report, Adrangi explains why the firm is shorting the shares of the Eastman Kodak Company and goes into details to explain what his firm is predicting to happen. Follow Sahm Adrangi on Twitter.
Kodak is a one hundred and thirty-eight year old company that has had a long history in the film industry that has is attempting to expand into the cryptocurrency and blockchain space. Sahm Adrangi explains that Kodak’s plan to use smart contracts and crypto-asset to avoid the infringement of copyrights is the basis of the company’s strategy. Recent share prices have shown a significant rise in the stock price as a result of releases by Kodak of its intent to enter the Crypto space. In the report, Kerrisdale Capital is suggesting that the concepts outlined in Kodak’s plan are not very sound and will ultimately not do well.
If what Sahm Adrangi is anticipating to happen occurs, he and his partners would stand to make a significant amount of profits by shorting the Eastman Kodak Company’s shares. Shorting stocks is a process by which an investor sells shares before they purchase them. The hop is that they will sell them at a higher price than that of what they will pay for it later, which will allow them to make the spread of the price difference. With the price of Kodak shares having risen to a point that is significantly above what Investor, Sahm Adrangi, believes it is worth, it is a perfect opportunity to sell or short the shares. When market information of performance results reaches the public, or the anticipation of this occurs, the prices would then be expected to fall. Once the prices fall, the shares would them be purchased at the lower price. Visit The Hedgefund Journal to know more about Sahm Adrangi.