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 ...
That would be completely out of character for Kodak. Hopefully the guys who are reinventing it are not the same guys who bankrupted it.
This is a interesting development.
2020 — talk about timing.
A developer is the one with the vision to turn a negative into a positive.
A renaissance meaning rebirth, born again
Isn’t that always the way. Without vision, people go off the derech.
I have to laugh. Kodak has ALWAYS been a chemical company. What does anyone think you use to develop film?
Ummm.....
That’s not a Kodak....
(I know I am showing my age.)
Did not Kodak invent the digital camera and hold the early patents?
They did invent to digital camera and had patented it. The OLED too.
Both a product of advanced chemistry. They simply did not have the electronics expertise to capitalize on many of their electronic breakthroughs. It was and is a chemical company.
Kodak virtually owned film and developing. There wasn't anyone else close. They feared the digital camera would kill the film and development market, so, they killed it in house.
This was in the 1970s, and worked out for the guys that made the decisions. They were retired by the time the digital revolution destroyed Kodak, but it left the company a shell.
Are they going to insist docs only write the scripts on Kodak paper?
Given how mismanaged they’ve been the last 30 years I don’t see this ending well.
[Re-inventing itself to be a drug making company]
“We’ll put the color in your cheeks.”
Your assessment is spot on.
Kodak stock went from $2.20 on monday to near $60 on wednesday and back to $33 in a few hours, back up a bit. $42.05 +35.17 (+437%)
https://finance.yahoo.com/quote/KODK?p=KODK
If only I had invested...... too late now. They received a gov’t contract for making some medicine. It may be a temporary boost so I do not trust the price.
It may go down as I never seen a stock go up so high in such a short time so I suspect no underpinnings to keep the stock up.
I bet some insiders (politicians) knew about the deal. BTW if I had invested on friday when it was $2.20 I would have had $29 million in 2 days....
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