Kodak Trading Choppy as loan controversy awaits vote result

Eastman Kodak (KODK) – Get the Eastman Kodak Company Report lost its pre-commercialization steam on Wednesday as presidential election results remain unclear.

Shares of the Rochester, NY chemical company, at last check, rose 0.5% to $ 7.18. In Wednesday’s regular session, they traded up to 3.1% and up to 5.3%. They increased up to 8% before marketing.

Eastman Kodak has been at the center of political controversy after former camera equipment maker got a loan of $ 765 million by the US International Development Finance Corp. The goal was to increase the production of a variety of drugs with the goal of bringing drug manufacturing back to the United States.

Shares rose 15 times after the announcement but then fell after the DFC froze the loan amid allegations of wrongdoing and a Securities and Exchange Commission investigation.

Democrats criticized the deal made under a Republican administration and demanded investigations into Kodak’s stock trading before the news broke

Senator Elizabeth Warren (D-Massachusetts) in August attacked the Trump administration on the loan, stating that “it is not at all clear why President Trump, in his executive order, chose to give [DFC] this new lending authority, but the mismanagement of the Kodak loan raises new concerns that it may be fundamentally unsuitable for the task.

Kodak shares rose 25% the day before the loan was announced, and Kodak executives, including CEO Jim Continenza, received 1.75 million stock options a day before its disclosure to the public.

In September, a law firm hired by the company concluded that Eastman Kodak mismanaged the grant of options to Continenza but did not break the law.

The firm determined that Kodak’s general counsel failed to properly brief the board of directors on the potential pitfalls of the loan announcement.

On Wednesday morning, investors may have reacted to the news that a victory for Democratic presidential challenger Joseph Biden did not look as certain as it did before election day.

The deal can be rescinded by a Democratic administration, when it likely has a better chance of survival under a Republican White House.

Continenza said last month that the company will continue to make generic drug ingredients whether or not it receives government assistance, the Wall Street Journal reported.

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