Eastman Kodak Company (KODK)

[MinnieM]

You are correct about them going down since they don't have the loan yet. Couple that with the SEC investigation the optics look really bad.

Disclosure... I went short after finding out they went up on a letter of intent. First time I've shorted anything in years. If it reverses on me I'll be out fast.






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Full Disclosure:
I have 15 put options on this stock at a strike price of $40 that expires end of week.

Speaking from an unbiased point of view, this stock is absolutely a dangerous bet. To be clear, the valuation of $60 that some are preaching here is absolutely nonsensical. in the coming days, i doubt it will drop below $11, but in the long term (next month or so) this stock is heading anywhere from $13 all the way down to its original price of $3 before this news of the $750M loan took place. reality is that the SEC will eventually find extremely fraudulent trading by a significant share holder who is also a MEMBER OF THE BOARD OF DIRECTORS. whether or not the penalty will be stiff, there runs an extremely large risk of the US Gov pulling their loan once the report on the investigation comes out.

with all this being said, most financial brokers are estimating value of the stock, regardless of the SEC outcome, to be between $12-$13 (see Barron's valuation).

Because of all the reasons above, i would suggest taking a Put option at a strike of ~$11-$12 expiring at the end of the month. by that time, the SEC report will be out for the public, and the stock itself is valued around that price point regardless of any violations.

take away point: this is only going down, the question is "how far down will it go?"

personally, i am going to purchase further put options expiring on 8/28