Kodak shares jump after the company gets a clean chit from the U.S. government. KODK was being investigated for the wrongdoings in the $765 million loan that was granted by Trump’s management to KODK for pharmaceutical production.
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Shares of Eastman Kodak Company (KODK) have spiked up to 80% during today’s session. Reportedly, Kodak has obtained clearance from the U.S. government.
As we write this at 1:00 P.M. EST, KODK was trading at $12.16 soaring by almost 62%. The trading volume is also pushing nearly around 112 million compared to the average volume of 15.7 million.
If we go back into mid-2020, the company was offered a loan of $765 millionby the Trump government. The loan was granted for the production of chemicals to manufacture COVID-19 vaccine. Soon after the loan grant, Kodak executives were accused of using the loan for their own benefit.
The government regulators took swift action against the company as its executives received stock options prior to the announcement of the loan on July 27. The questions were raised that if Kodak’s executives including CEO Jim Continenza had used loan grants for personal profit.
Talking to CNN Business in August, Kodak mentioned that they didn’t intend to unveil the details until July 28. Following the loan announcement, KODK stock rallied up to 3,000%, however, it has plunged since then.
In September, Kodak’s lawyers proved that the company wasn’t involved in any wrongdoing or illicit activity. Despite that, it was not enough for the company to satisfy Congress and the investigation continued. This kept the stock in a bearish zone.
After all the struggle, late on Sunday the Wall Street Journal revealed that the U.S. International Development Finance Corporation that lent to Kodak has found no evidence of delinquencyon part of DFC officials. The inspector general cleared Kodak from the action highlighting no wrongdoings in the government’s processadministering the loan.
Kodak has faced a lot of criticism in regard to the first-of-its-kind loan during the summer. Despite getting the clearance, the loan stays on indefinite hold. The investigation is under examination of the SEC and other pending questions from the legal bodies.
Although Kodak was found innocent, it cannot hide the fact that the company bungled stock options to its CEO and all the event led to KODK’s stock falling to earth.
Kodak in its prior statement highlighted that it is committed to practicingtop-notch governance and transparency. The review finding by the law firm Akin Gump Strauss Hauer & Feldhas revealed the truth that insider-trading laws were not violated.
However, the company admitted the fact that it must strengthen its procedures and make strong policies.
