Eastman Kodak Co. (NYSE: KODK) has been a favorite for retail traders of late, with its massive volume and even greater swings. This stock received a resounding vote of confidence from traders on Monday in regards to its “suspect” COVID-19 loan.
This company was a photography giant but only recently has pivoted into generic pharmaceuticals. With this new direction and under the auspices of the federal government, Kodak received a sizable loan (which many considered ill-gotten) for the development of COVID-19 materials.
Needless to say, when the U.S. International Development Finance Corporation (DFC) gave a $765 million long-term loan to support generic pharmaceuticals production at the company, this raised a few eyebrows.
In a letter dated August 4, Senator Elizabeth Warren (D-MA) asked U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to investigate stock purchases by Kodak CEO Jim Continenza and board member Philippe Katz “while the company was involved in secret negotiations with the government over a lucrative contract,” saying the trades “[raise] questions about whether these executives potentially made investment decisions based on material, non-public information derived from their positions.”
However, according to the Wall Street Journal, the inspector general of the DFC noted that there was no evidence discovered that employees of the agency had any conflicts of interest. Further, the inspector general said that there was no misconduct found on the part of the agency officials.
Traders have to be happy with this as the stock is surging on Monday. Although shares are not reaching their highs seen over the summer, the setup has to be encouraging at least for now.
Kodak stock traded up about 60% at $12.10 on Monday, in a 52-week range of $1.50 to $60.00. The consensus price target is $1.00.
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