Investigation into government loan to Kodak reveals no wrongdoing, share price increases 80%
Earlier this year, a struggling veteran of our industry got a lifeline in the form of three quarters of a billion dollars to help with drug production, in part to fight the pandemic, but also to reduce addiction. vis-à-vis foreign pharmaceutical companies. . However, the legality of the loan was called into question soon after.
Kodak is a household name and one of the founding fathers of our industry who is still alive today, but that survival has at times seemed questionable in recent years. Then, at the end of July of this year, we saw a pretty unexpected change in luck for Kodak. The US government has given Eastman Kodak a loan of $ 765 million to help manufacture drugs. This saw a knee-jerk reaction in the stock market, with the price rising to the best part by 3,000%. The story took a slightly bitter turn, however, when it was made public that Kodak Executive Chairman and CEO Jim Continenza had received stock options a day before the loan was announced. This news helped the stock price return closer to normal.
Yesterday, it was announced that the American International Development Finance Corporation’s (DFC) investigation into this government loan to Kodak did not contain any wrongdoing, which led to another much lower spike of 80% of the share price. DFC inspector general said no evidence was found of conflicts of interest with agency employees, as well as no wrongdoing in administering the government loan, Wall Street reports Newspaper. It should be noted, however, that the stock options received by Continenza in the days leading up to the loan were not as clear cut.
The $ 765 million loan – which had been halted – is likely to resume, but no news on when or confirmation of this has yet been released. The Kodak stock price started to rise again and rose from $ 7.53 at the bell on Friday afternoon to $ 12.04 yesterday. This is still a drop from the peak of the unexpected peak in July, which saw it hit $ 33.20, but has improved significantly from the $ 1.50 to $ 3 price point that it wore for most of 2020.