Kodak investigated by SEC over announcement of drug-making loan

Kodak

The US Securities and Exchange Commission is investigating the circumstances around Eastman Kodak’s announcement of a $765m (£585m) government loan to make drugs at its American factories, the Wall Street Journal has reported.

Shares at the former film company, best known for its camera business, skyrocketed after the surprise announcement last week Tuesday. Stock climbed as high as $60 in the following 48 hours, before falling back to $15 on Monday.

Jim Continenza, Kodak’s executive chairman and chief executive officer, was handed 1.75m stock options the day before news of the loan broke.

That Monday shares climbed 25pc on a day the S&P 500 rose just 0.7pc. It was the largest percentage rise for Kodak since May, and at the time, it was the second-biggest one-day jump in 2020.

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On the announcement President Donald Trump said the federal loan from the US International Development Finance Corporation would help reduce the United States’ reliance on other countries for the majority of ingredients used to make generic drugs.

The move was called “a breakthrough in bringing pharmaceutical manufacturing back to the United States”.

Kodak shares were down around 12pc at $13 in late trade on Tuesday, valuing the company at $579m.