Hi,
could you please give a valid source for ".....date in 2019 when they need hundreds of millions of dollars (that they do not have today) to pay off their preferred stock holders."
Thank you very much in advance!
Cheers, Jan
Kodak was recently downgraded by two analytical firms and inside one of the reports was the information that preferred stock issued by Kodak had to be repurchased in 2019 at $17.50/share if the price was below that level (it's currently $6.xx/share). The conclusion of the downgrade was a statement of a near certain second bankruptcy. The stock plunged hard after these reports came out of course.
That report seems to be behind a paywall now so I can't reference it here. I am still looking for a free copy of it and will return here to post it if I am successful.
Edit: While searching for the above report, I found a different one, one that is sadly even more bleak about Kodak's future than the original one I referenced. Here's a snippet.
"Kodak’s results and significant negative guidance revisions are not the result of an industry-wide slowdown; they are symptomatic of poor execution, an uncompetitive product set, and lack of operational visibility. Kodak shareholders are underwriting an increasingly vulnerable credit profile. In an S&P report following 3Q17 results, downgrading the rating on Kodak’s credit to CCC+/Outlook negative, the agency noted diminished liquidity reserves, low covenant headroom and estimated recoveries of ~65% for the senior bank debt in the event of a default. 36 For retail equity investors unsure of the implications of that statement, it means that S&P sees so little value in the company that even the most senior of creditors
will not be made whole and the equity is worthless."
"In our leverage and free cash flow forecast, we conservatively assume cost-saving measures succeed in keeping operational EBITDA flat and free cash flow improves from 2017 but remains negative. Even with this relatively optimistic set of assumptions, we estimate Kodak will violate its senior secured leverage ratio covenant of 2.75x by 1H19."
This is from a 21 page article that gives THE most thorough analysis of Kodak's financial metrics I have ever seen. In no instance does any metric look positive. Kodak's cash flow situation is absolutely dire. They need hundreds of millions of dollars to break even and their cash flow is trending downwards, not up.
That is why we are seeing this Kodak Coin scam. The situation is so desperate that anything that can generate revenue is being tried, despite it having almost no chance to succeed.
