Kodak shares plunge after US locks up $ 765 million loan deal

(Reuters) – Shares of Eastman Kodak Co KODK.N fell about 40% on Monday and were on track for their worst single-day drop after the U.S. government blocked a $ 765 million loan to the company, which was to manufacture drug ingredients for use in possible COVID-19 vaccines, due to “wrongdoing” by the leaders.

The United States’ International Development Finance Corp (DFC) was to grant the loan to Eastman Kodak, which is seeking to gain a deeper foothold in the pharmaceutical field.

But alarms were raised after senior Democratic lawmakers called on federal regulators to investigate securities transactions made by the company and its executives around the time it learned it could receive the government loan. .

US President Donald Trump said last week that the government would investigate the circumstances surrounding the loan announcement.

“The recent allegations of wrongdoing raise serious concerns,” the US International Development Finance Corp (DFC) said in a tweet Friday evening.

The company’s shares have more than quintupled, with retail traders on the popular Robinhood trading app accumulating in the shares since DFC announced it would sign a letter of interest to provide the loan to the company.

More than 900 million shares have traded hands since the loan was announced, nearly 12 times the company’s outstanding shares.

The company’s shares were down 39.50% to $ 9 on the pre-trade Monday.

Report by Akanksha Rana in Bengaluru; Edited by Bernard Orr

About Hannah Schaeffer

Check Also

Indonesian priest’s hydropower project loses its spark

Almost ten years ago, Father Marselus Hasan made it his mission to provide hydroelectric power …