Eastman Kodak Share Price Set to Tumble As $765mln Loan Held Up

Daniel Fowler
August 10, 2020

Kodak stock skyrocketed with the announcement, but there was also heavy trading activity when word of a big deal leaked out, and Democratic members of Congress have called for an investigation into the timing of events, as well as stock-option grants issued to executives ahead of the loan announcement.

It was announced July 28 that Kodak would receive a $765 million federal loan to aid the U.S.in reducing its reliance on other countries for ingredients used in generic drugs.

"Recent allegations of wrongdoing raise serious concerns".

Shares of Eastman Kodak faced a bitter sell-off Monday, tanking more than 40% in pre-market trade on reports that its $765 million loan to produce pharmaceutical ingredients has been put on hold. "We will not proceed any further unless these allegations are cleared", DFC said on Twitter.

White House economic advisor Peter Navarro on Friday tweeted that he was "very disappointed" with the allegations against the firm.

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The Journal recently reported Kodak had shared information about an agreement between the company and the Trump administration with media outlets before the public announcement. The news sent Kodak's stock skyrocketing.

The government's interest in Kodak-a photography company that declared bankruptcy in 2012 and has no experience in drugmaking-as well as insider trading allegations spurred a growing number of investigations in recent days.

The SEC is also expected to examine the stock options granted to executives on July 27.

The loan, meant to support Kodak, a technology and pharmaceutical company, in producing drug ingredients, was announced on July 28. It was down 30% to $10.42 at 9:57 a.m.in NY.

The loan to Kodak comes at a time when the Trump administration has been looking to bolster the ability to produce drugs and their raw materials in the United States after the COVID-19 pandemic exposed the industry's dependence on China and India for its supply chain.

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