Earlier this year, a struggling veteran of our industry got a lifeline in the shape of three-quarters of a billion dollars to assist in the production of drugs, in part to aid with the pandemic, but also to reduce the reliance on foreign drug companies. However, the legality of the loan was called into question shortly after.
Kodak is a household name and one of the founding fathers of our industry that is still alive, but that survival has looked doubtful at times in recent years. Then, at the end of July this year, we saw a rather unexpected change in luck for Kodak. The U.S. government gave Eastman Kodak a $765 million loan to help make drugs. This saw a knee-jerk reaction in the stock market, with the price rising the best part of 3,000%. The story took a slightly sour turn, however, when it was made public that Kodak’s executive chairman and CEO, Jim Continenza, received stock options one day before the loan announcement. This news contributed to the returning of the stock price back closer to normality.
Yesterday it was announced that the U.S. International Development Finance Corporation (DFC) investigation into this government loan to Kodak contained no wrongdoing, which has lead to another, much smaller spike of 80% in the share price. The inspector general of the DFC said that no evidence had been found of conflicts of interest with employees of the agency, as well as no wrongdoing in the administering of the loan from the government, The Wall Street Journal reports. It is worth noting, however, that the stock options Continenza received in the days leading up to the loan were not as clean-cut.
The loan of $765m — which had been halted — will presumably now resume, but no news on when or confirmation of this has yet been released. The share price for Kodak has begun to rise again and has increased from $7.53 at the bell on Friday afternoon, to $12.04 yesterday. This is still some drop from the peak of the unexpected spike in July, which saw it reach $33.20, but markedly improved from the $1.50 to $3 price it carried for the majority of 2020.