Posted on 07/29/2020 9:13:39 AM PDT by SeekAndFind
Eastman Kodak shares are enjoying a renaissance. Shares were up 160% early Wednesday morning, building on Tuesday’s incredible 200%-plus gain. That gain was just a prelude. By midday, Kodak shares were up more than 340%. Fresh capital and a new business are the reasons for the eye-popping rise. The question for investors now is how high can shares go?
It isn’t an easy question to answer. There are no analysts covering the company and no target prices to help investors. What’s more, the company is taking a government loan to build a drug-ingredient business. Kodak (ticker: KODK), has been and is in the imaging business. Valuing a huge new business is hard for any investor evaluating a company.
Kodak stock traded at above $17 in 2015 in its return from bankruptcy protection, trading at about 0.4 times sales. The company is trading for more than 1 times sales now, at more than $38 a share, adding in the new debt the government is providing. The old highs have already been eclipsed.
Shares actually hit $56 at one point Wednesday. Incredible.
Is that too high? Kodak’s new business is generic-drug ingredients. Generic-drug makers trade for roughly 1.5 times sales. Of course, Kodak doesn’t have the business yet. And when it does, all of its sales won’t be drug related.
Generic-drug makers take about $1 in assets to generate 40 cents in sales. Based on that, Kodak’s fresh $765 million loan could bring, perhaps $300 to $400 million in sales. That would be worth, in theory, about $450 to $600 million in market value.
That’s a finger-in-the-air approximation. And investors need to add in coming debt when valuing the entire enterprise. There is just no great way to know where the stock can go this early in its transformation.
(Excerpt) Read more at barrons.com ...
PDJT loaned them some money apparently so his HCQS stocks would rise. /$
Mama, don’t take my Kodachrome away
Good flexibility and vision by Kodak executives.
That’s just funny...good for them.
They seemed to have failed envisioning digital cameras and streaming though
A better mouse trap is ALWAYS in play.
Eastman Kodak Company / 31.31 +23.37 (294.33%) / KODK(NYSE)
A lot of people are gambling on this stock, not investing.
Seems like a fraud to me. What do they know about it?
RE: Seems like a fraud to me. What do they know about it?
They’re re-inventing themselves, which means they can HIRE the people who know about it.
Seriously, it's the lack of flexibility and vision that ruined the company
Amazing what happens to a stock when the government gives them $750 million.
Having been at Kodak during that time... nobody could see the drastic change in computer technology and the drops in prices.
Kodak was always a chemical company and their photography business was still a chemical business. They were never an electronics business and had zero executive experience in that segment.
Kodak was into chemical production YEARS ago, and not just for chemicals used in film development. They have the facilities that may be readily adapted to the production of pharmaceutical components and the manufacture of licensed generic prescription drugs.
Not really much of a stretch at all, and Eastman Kodak is once again on a path to revived expansion and recognition.
Eastman Kodak actually invented “Crazy Glue” but never pursued it. Oh well....
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