In January, investors piled into Eastman Kodak after the company announced its plans to bring a cryptocurrency coin offering, or ICO (Initial Coin Offering), to the market. In response, shares skyrocketed up about 160%, a jaw dropping return for one month!
This proposed KODAKCoin, is meant to support their new imaging and licensing business, called KODAKOne.
However, following investors irrational rush into KODAK’s stock, just one month later in February, the hyped announcement quickly wore off as the company reported concerning news that the ICO was on hold. Eastman Kodak also faced scrutiny regarding a top advisor, Cameron Chell, who was banned from the Alberta Stock Exchange, among other things. The strings of negative news sent shares tumbling, and will probably continue dropping
If the KODAKCoin were to ever happen, I personally don’t see a lot of upside as far as value is concerned, because the success of the coin rides completely on a select part of Kodak’s business. It’s basically stock in crypto form. There’s probably not a lot of unique innovation and applicational opportunities outside of their own company.
The lesson for investors is simple, don’t rush into anything without first evaluating a company fundamentally. That means diligently looking at the hard numbers and financial health, effectiveness of management and leaders, analyzing valuation and future value, all which are merely the basics of making a wise investment. Today, it becomes very easy to get sucked in by the news, ‘’hot tips’’, or what have you. However, that would be speculation, not intelligent investing.
Always keep in mind, Warren Buffet, the greatest equity investor of all time, and one of the richest men in the world, doesn’t even use a computer to conduct his analysis or buys! Being totally uninfluenced by the wiles of the financial media.
Thank your very much for reading!
j-james