Why Eastman Kodak Stock Rocketed 83% This Morning

What happened

The shares of erstwhile camera-film giant Eastman Kodak (NYSE: KODK) The rocket exploded out of the gate this morning, rocketing up 83% before stopping to catch its breath and retreat slightly. As of 11:20 pm EDT on Wednesday, the stock was still significantly up at 37.8%.

And all because of something Eastman Kodak said.

Image Source: Getty Image

So what

As Wall Street Journal This morning, a committee appointed by Eastman Kodak’s board to investigate the circumstances surrounding the company’s approval of a $ 765 million loan from the US government in July found that Kodak did not break any law.

The loan was made to help produce pharmaceutical ingredients for the fight against the coronaires, and it sparked a rally in Kodak’s shares – even before the loan was officially announced. After the investigation, insider trading may have been encouraged by information leaks within the company, and Kodak may have given stock options to high-level executives before the loan was announced, so that they could benefit from it. . But the special committee hired through Kodak’s law firm Akin Gump found no such wrongdoing.

now what

But there is still talk of a federal investigation into the company. For example, tomorrow magazine Reported that the Inspector General of the US International Development Finance Corporation (IDFC) is reviewing the loan. And this is on top of ongoing investigations by the Securities and Exchange Commission and several congressional committees.

There is no assurance that these other investigations will come to the same conclusions that Kodak’s own investigation has drawn. Meanwhile, IDFC has suspended payment of the loan amount to Kodak, and the money will not be released until these other investigations are concluded.