Kodak shares rise 80% after investigation allegedly not finding irregularities in government loans
The stock price of the former Eastman Kodak photography icon skyrocketed in the pre-market. The company received good news about a potential $ 765 million loan announced in July.
This potential loan – from US International Development Finance Corporation, or DFC, to Kodak (KODK) to start a generic drug ingredients business – came under intense scrutiny because of the Kodak (KODK) stock trading at the time of the announcement.
US government regulators are allegedly investigating why Kodak announced the loan on July 27, the day before the official announcement – on the same day, some executives, including Jim Continenza, Kodak’s chief executive and CEO, were given options to actions.
Kodak, in a statement, said it did not intend to make these details public until July 28. The stock soared nearly 3,000% in the days following the loan’s announcement and has since declined since then.
It was a confusing situation. This led to an investigation by the Securities and Exchange Commission, as well as analyzes by Kodak and DFC. Some of these investigations are ending. On Sunday, The Wall Street Journal reported that a DFC government oversight body found nothing unusual in the process of granting Kodak its potential loan.
The news was great for Kodak. Deciding what this means for investors, however, is a difficult task. The stock soared to $ 12.90 in pre-market trading.
Including pre-market earnings, Kodak’s shares rose about 180% in the year, much better than the comparable returns of the S&P 500 and the Dow Jones Industrial Average. This leaves Kodak with a market value of around $ 930 million.