Easily the biggest mover on Monday was Eastman Kodak (NYSE: KODK), a former photography manufacturer that’s since decided to transition into the pharmaceutical industry instead. The company’s stock exploded as much as 80% in the morning after news broke that a U.S. agency watchdog found no wrongdoing with a controversial loan deal from the Trump administration.
Early this year, Kodak was one American company to receive a crucial deal from the American government in order to produce pharmaceutical ingredients within the country, rather than having to import it. However, the Securities and Exchange Commission (SEC) ended up launching an investigation into the deal and whether there was any insider trading involved between the two parties.
As it turned out, however, there doesn’t appear to be any signs of wrongdoing. Kodak had already concluded its own independent investigation, which came to a similar conclusion as well. Anthony Zakel, the inspector general of the U.S. International Development Finance Corp, issued a response where he did not find “any evidence of misconduct on the part of DFC officials.”
“The record is abundantly clear and the independent IG review confirms that DFC followed its standard process, under its standard timeline, driven by career finance professionals,” a said another spokesperson for the group. Kodak refused to comment on the news, although the company had already insisted it had done no wrong for a while now.
Senator Elizabeth Warren, who was the first U.S. lawmaker to call for an independent investigation, issued her own comments saying that these results are not enough to prove there wasn’t wrongdoing on the side of Kodak. Investors, however, seem to disagree, with the response to this news being met with extreme enthusiasm.
Shares of Kodak shot up by as much as 90% on Monday after the news broke. Considering that this scandal was the main thing looming over the company’s head, so to speak, it’s not surprising that investors reacted to the news with such bullishness. However, even after today’s jump, however, shares are still trading at a 60% discount from where they were in August before the scandal first broke out.
Kodak’s transformation into a pharmaceutical manufacturer hasn’t been much of a success story until President Trump announced he intended to bring pharmaceutical manufacturing back domestically. As such, Kodak winning a major government loan contract was seen as a chance for the former photography giant to return to prominence in an entirely new industry. Now that this report has cleared up these rumors, it seems possible that Kodak might indeed make a major comeback in the years to come.
Eastman Kodak Company Profile
Eastman Kodak Co is a United States-based company. The company operates via several business segments: Print Systems, Enterprise Inkjet Systems, Kodak Software, Brand, Film and Imaging, Advanced Materials and 3D Printing Technology and Eastman Business Park. The print systems segment which derives majority revenue offers digital and traditional products and services to various businesses, such as commercial print and book publishing, and this segment contributes over half of total revenue. The company has a global business presence, with overseas markets accounting for a majority of revenue. – Warrior Trading News
