The Kodak Eastman Company has been on the verge of a financial crisis for years and Sahm Adrangi thinks they will soon be declaring bankruptcy. This comes after he and Kerrisdale Capital, a company that he founded and is currently the chief investment officer of, published a negative report on the company’s future. A few months ago, Kodak announced that they would be releasing two new products that they insist will change how photographers get paid for their work. Unfortunately for Kodak, Sahm Adrangi does not agree.
Sahm Adrangi has made a large part of his fortune by predicting the failure of shady companies and arranging short sales of their stocks. This is essentially betting against a company instead of for like traditional stock investments. If Sahm Adrangi’s predictions about Kodak Eastman are correct, he and his investors stand to make a lot of money with this short sale attack.
These two new products that Sahm Adrangi doesn’t see even completely making it to market are being called KodakCoin and KodakOne. KodakCoin is a digital currency that is an attempt by Kodak to capitalize on the cryptocurrency craze that is sweeping the world. KodakOne, a concept that Sahm Adrangi considers a flat out “silly” idea, promises to compensate photographers for their work that is being used without a license. Supposedly, KodakOne will use blockchain technology to identify the images that are being used unlicensed and then contact the company or individual who is using them in order to request payment. While there are several legal and technical issues that Kodak will face in the development of this product, one of the biggest hurdles is one of the simplest ones. KodakOne would pay the photographers whose images are being used without permission with their new cryptocurrency KodakCoin. It’s highly unlikely that anyone would prefer this payment method to traditional currency.
For Kodak Eastman Company, their years of attempting to operate on a capital structure that just isn’t sustainable may finally be catching up to them. While KodakCoin and KodakOne may be exciting to investors now, it’s only time before they fizzle out.