GreenSky : 21st Century Lending

GreenSky has become a prominent name in the lending industry, and this financial technology company has provided loans to consumers who fall under certain fields. These fields just so happen to be solar, healthcare and home improvement. The economy has certainly benefited from this lending program as it has generated close to $5 billion between 2012 – 2016. GreenSky  is federally-insured, and it provides these loans to banks and merchants. Fintech, a conglomerate of startups and private businesses, is an innovative application process of the financial-services industry that offers end-to-end processing via the internet. GreenSky  is one of the startups that is thriving in this community despite being less prominent than Lending Club Corp and Social Finance Inc.

How Does The Business Model Work?

This particular company has been in business since 2006. One of the biggest differences with GreenSky is that it doesn’t use its own assets for making loans. GreenSky has actually partnered with other financial institutions to make these loans a reality. As of 2016, this partnership now includes up to 14 different financial institutions. The idea and concept are rather brilliant to some degree, and the program’s mobile app is connected to over 12,000 merchants that fall under the three categories above. To get a more in-depth understanding of how this business model is succeeding, Wikipedia has a full-disclosure of the program. Individual contractors and retailors such as Home Depot have all benefited from GreenSky ‘s mobile app.

What’s The Future Outlook?

GreenSky  brought in an estimated $325 million in 2017. Thanks to its huge success, the company added a multi-million dollar expansion at its Atlanta location that created up to 350 jobs. In total, GreenSky has over 900 employees, and its growth is expected to continue for many more years. What more could you ever ask for in a lending company?

Sahm Adrangi on the Absurdity of KodakOne

Sahm Adrangi, head of Kerrisdale Capital, had quite a bit to say about Eastman Kodak Company’s (NYSE:KODK) image rights management platform called KodakOne. His thoughts about this 138-year old company were not at all favorable.

While Kodak’s stock doubled after they announced a blockchain and cryptocurrency licensing partnership, Sahm Adrangi asserts that nothing will be achieved by the use of blockchain as an image copyright platform.

Kerrisdale believes blockchain does not minimize the amount of resources necessary to prevent copyright infringement, nor does it lower the risk. Kodak has discussed paying photographers with KodakCoins, a cryptocurrency that would be used with KodakOne.

Sahm Adrangi argues that Kodak’s actions are a stock promotion and an attempt to take the focus off of their troubled financial position. Though blockchain is in fact a legitimate technology for some industries, Sahm Adrangi does not believe photo licensing and management is one of them.

Kerrisdale Capital called KodakCoin nonsensical as a way to pay photographers because it’s only marketed to accredited investors, which means only photographers with a net worth of $1 million or an annual income of $200k can participate in the ICO. While cryptocurrency will be used by speculators, it will not be used by many image buyers or photographers.

Kodak did not develop, nor do they own, any blockchain technology. KodakOne was developed by WENN Digital. Kodak is simply a licensor that will collect royalty payments when transactions are processed. This means that the success of KodakOne is tied to WENN Digital.

With rising debt and a negative cash flow, Adrangi believes Kodak’s management has failed its investors. After Chapter 11 bankruptcy in 2011, Kodak failed to resolve the issues that led to the Chapter 11 filing. Sahm Adrangi believes Kodak’s recent actions are an attempt to prevent a fall back into bankruptcy.

The above referenced issues, along with suspicious trading activities by Kodak shareholders, are just some of the reasons why Kerrisdale Capital has called the equity worthless.