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Saturday, November 28, 2020

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Some of the investors in the year 2020 have taken some eerie decisions. These investors mostly belonged in the SPAC or the special purpose acquisition company. The Kodak stock was one of the dumbest decisions that were taken by the investors. For the Kodak stock, there has been a lot of bad moves.

Kodak stock shortcoming

Investors mostly had been seen to have a short memory. Kodak has had a horrible time recovering from bankruptcy. In the year 2012 January Kodak had filed for Chapter 11. This was bankruptcy protection worth 5.1 billion dollars in assets. This was also transmitted into 6.8 billion dollars in liabilities. The creditors in turn took it seriously and cut a slack of 4.1 billion dollars in total as an elimination to Kodak’s debt. In around 19 months, Kodak recovered from bankruptcy. This was only possible after they had applied to Chapter 11 that pulled them out of the bankruptcy. 

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Kodak’s position was claimed as a tragedy in the American economy. However, in 2003 the company posted an amount of 13.3 billion dollars as its revenue. This was possible because a lot of employees were shrunk. From an employee number of 64 thousand, Kodak eliminated employees to 17 thousand. Even after that, the revenue did not pick up. The revenue was around 6 billion dollars. This was due to the disruptive business model of the company that led the Kodak stock to come down. 

Businessmen were now realizing that Kodak was not a good company to invest their money in. In 2020, Kodak changed the company’s premises to a pharmaceutical company. In jest, many investors mocked that now Kodak was trying to find a cure for the coronavirus.

Hertz stock:

Like the Kodak stock, Hertz stocks were also subsequently falling. Carl Icahn, the CEO of Hertz had lost almost one billion dollars on a company that rented cars. However, despite the shocking loss, many investors put in their money to combat the loss that Hertz was facing. It was understandable that the situation that Hertz had put themselves in was a total shocker. It was understandable that with the help of a loan or no loan situation, nobody could save Hertz.

Whiting Petroleum stocks

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Whiting Petroleum entered a situation where they had to look for protection against bankruptcy. Such was the same for Kodak stock. While Whiting Petroleum applied for bankruptcy protection in April, it helped them out of the estimated situation in September. At a 3 percent ownership stake, Whiting Petroleum still received enough loans to help them survive the bankruptcy position. 

The company got around one new WLL share for the 75 old shares. At the end of September, however, there were 90 million outstanding shares that the company had to clear for a market cap of 533 million dollars. Therefore it is understandable that it was not a good initiative to put money into these companies. It is because their bad financial position did not allow them to repay their investors with or without interest.

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