Form 4: Kennedy Lewis Funds Boost Eastman Kodak Stake

Kennedy Lewis Investment Holdings II LLC and affiliated funds purchased 1 million shares of Eastman Kodak's 4.0% Series B Convertible Preferred Stock.

Summary

• Kennedy Lewis Investment Holdings II LLC, along with directors Darren Richman and David Chene, reported the purchase of 1,000,000 shares of Eastman Kodak Company's 4.0% Series B Convertible Preferred Stock.
• The transaction occurred on December 5, 2025, with the shares acquired from third-party sellers in privately negotiated transactions.
• The purchase price was $101.50 per share of Preferred Stock.
• Each share of Preferred Stock has a liquidation preference of $100 and pays cumulative quarterly cash dividends at 4.0% per annum.
• The Preferred Stock is convertible into Eastman Kodak common stock at a rate of 9.5238 common shares per preferred share, subject to a 4.99% beneficial ownership limitation on common stock post-conversion.
• Eastman Kodak can force mandatory conversion if its common stock price equals or exceeds $14.50 for 45 trading days within a 60-day period.
• The Issuer is subject to mandatory redemption of the Preferred Stock 91 days following the fifth anniversary of February 26, 2021 (original issue date).

Sentiment

Score: 8

Explanation: The significant purchase of convertible preferred stock by a 10% owner and directors, including those with control over the investing entities, indicates strong insider confidence in Eastman Kodak's future. This is generally a very positive signal for investors, despite the unusual future transaction date.

Positives

• A significant investment by a 10% owner and directors signals strong confidence in Eastman Kodak's future prospects.
• The purchase of 1,000,000 shares of convertible preferred stock represents a substantial commitment from a key institutional investor.
• The preferred stock offers a 4.0% cumulative cash dividend, providing a steady income stream to the holders.
• The conversion feature allows for participation in potential common stock appreciation, with a conversion rate of 9.5238 common shares per preferred share.

Negatives

• The transaction date of December 5, 2025, is unusual for a Form 4, which typically reports past transactions, potentially indicating a pre-arranged future transaction or a delayed filing for a past event.
• The 4.99% beneficial ownership limitation on common stock conversion could restrict the immediate full conversion of the preferred shares into common stock by the Funds, potentially impacting their liquidity or control.

Risks

• The value of the convertible preferred stock is subject to the performance of Eastman Kodak's common stock, as the conversion feature is directly tied to it.
• The beneficial ownership limitation could prevent the Funds from fully exercising their conversion rights immediately, potentially impacting their ability to realize full upside or exert control.
• Mandatory conversion by the Issuer, if the common stock price threshold is met, could dilute existing common shareholders or force preferred holders to convert at a potentially less opportune time.

Future Outlook

The filing indicates a long-term investment by Kennedy Lewis, with the preferred stock having a mandatory redemption date 91 days after February 26, 2026, and potential for mandatory conversion by the Issuer if the common stock price reaches $14.50. The ability for the Funds to adjust their beneficial ownership limitation suggests flexibility in their future common stock holdings.

Management Comments

• Darren Richman, an effective control person of each of Kennedy Lewis Investment Management LLC and Kennedy Lewis Investment Holdings II LLC, serves on the Board of Directors of Eastman Kodak Company.
• By virtue of their representation on the Board of Directors of the Issuer, for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, each of the reporting persons other than Mr. Richman are deemed directors by deputization of the Issuer.

Industry Context

This transaction reflects continued investor interest in companies undergoing transformation or with specific niche market positions, such as Eastman Kodak. The investment by a significant institutional holder and director suggests a belief in the company's long-term strategy or asset value, potentially indicating a turnaround play or value investment in a legacy industry player.

Comparison to Industry Standards

• The purchase of convertible preferred stock by a significant investor and director is a common strategy for gaining exposure to a company's equity upside while also securing a fixed income stream and liquidation preference, often seen in companies with perceived higher risk or growth potential.
• The 4.0% dividend rate and $101.50 purchase price relative to a $100 liquidation preference are specific to this deal and would require comparison to other convertible preferred offerings in similar market conditions or for companies with comparable risk profiles.
• The 4.99% beneficial ownership limitation is a standard provision to avoid triggering certain regulatory reporting requirements or change of control provisions.

Corporate Governance

Stakeholder Impact

• Shareholders: The purchase by a significant insider and 10% owner could be viewed positively, signaling confidence. Potential future conversion of preferred stock could lead to dilution of common shareholders, though the 4.99% beneficial ownership limit mitigates immediate large-scale dilution.
• Creditors: The preferred stock has a liquidation preference, which ranks it above common stock in a liquidation scenario, potentially impacting common shareholders but providing a layer of security for preferred holders.

Next Steps

• The Issuer may exercise its right to cause mandatory conversion of the Preferred Stock if its common stock price meets the $14.50 threshold for 45 trading days within a 60-day period.
• The Issuer is subject to mandatory redemption of the Preferred Stock 91 days following the fifth anniversary of February 26, 2021.
• The Funds may increase or decrease their 4.99% beneficial ownership limitation with 61-days' prior written notice to the Issuer.

Key Dates

Recommendation

The substantial purchase of 1,000,000 shares of convertible preferred stock by Kennedy Lewis Investment Holdings II LLC, a 10% owner, and its affiliated directors (Darren Richman and David Chene), represents a strong vote of confidence in Eastman Kodak's future. Insider buying, particularly of this magnitude and by individuals with deep insight into the company's operations and strategy, is a highly bullish signal. The convertible nature of the preferred stock allows for participation in potential common stock appreciation, while the 4.0% dividend provides a steady income stream. This indicates that sophisticated investors believe the company's equity is undervalued or poised for significant growth.

Keywords

Eastman Kodak, KODK, Kennedy Lewis, Convertible Preferred Stock, Insider Trading, Form 4, Beneficial Ownership, Director Purchase, Investment Holdings