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30 July 2020 12:39

Kodak NYSE:KODK Stock

Kodak Stock Surges 1,500% After Shift to Pharmaceuticals Amidst COVID-19

The famed photography technology company has seen a major stock surge after pivoting its business to the production of generic drug ingredients. The surge is partly due to U.S. President Donald Trump mentioning the company by name earlier this week after the government funded Kodak with a $765 million USD loan under the Defense Production Act. For those unaware, under the leadership of chairman Jim Continenza, Kodak began producing personal protective equipment (PPE) once the Coronavirus pandemic hit which lead to its move into pharmaceuticals. As chairman Jim Continenza bought 46,737 shares of Kodak stock on June 23 at an average price of $2.22 USD, the $103,575 USD investment is now worth more than $1.5 million USD. This is potentially a major scandal Kodak stock is up EXPONENTIALLY since TUESDAY, when Trump announced that it was providing $750 million loan to help the company get into generic drugs But there was a massive increase in trading volume on MONDAY — Judd Legum (@JuddLegum) July 29, 2020 Kodak CEO Jim Continenza could net more than $135 million from the camera company's 1,200% stock surge in two days this week. Continenza owns 650,000 Kodak shares, 3.8 million stock options, and potentially another 242,000 shares tied to his reelection as a director.

Those holdings are worth more than $135 million after costs, based on Kodak's closing stock price of $33.20 on Wednesday. Kodak's shares approached $40 in pre-market trading on Thursday, meaning Continenza could see an even bigger return. Kodak CEO Jim Continenza is poised to make more than $135 million after the camera company's stock soared about 1,200% in two days this week. Continenza owns 650,000 Kodak shares, stock options allowing him to buy another 3.8 million shares at prices between $3 and $12, and phantom stock tied to his reelection as a director that will grant him another 242,000 shares, Securities and Exchange Commission filings show. The Kodak boss was granted 1.75 million of the stock options on Monday under an incentive plan introduced in 2013, SEC filings show.

Read More:A market-research expert breaks down the 3 sectors and 4 stocks that he says are best to own as a new Cold War between the US and China heats up Kodak, a company best known for making cameras and photographic film, saw its stock price explode this week after it secured a $765 million government loan to make drug ingredients in response to the coronavirus pandemic. Continenza bought his 650,000 Kodak shares for roughly $1.5 million between August 2019 and June 23 this year, SEC filings show. They have surged in value from about $1.7 million on Monday to $21.6 million on Wednesday, based on Kodak's closing stock price of $2.62 and $33.20 on those days. Meanwhile, Continenza's stock options allow him to eventually buy 3.8 million more shares for less than $18 million. Those options were basically worthless on Monday, but could now net him $108 million based on Kodak's closing price on Wednesday.

Overall, Continenza's stock, options, and phantom stock are worth more than $135 million after costs, assuming Kodak shares trade at $33.20 or higher when he cashes out. Continenza's holdings could also be worth significantly more than that: Kodak's shares climbed as high as $40 in pre-market trading on Thursday. The shares of the camera company Kodak gained 30 times value in two days with the effect of revealing the agreement reached with the American government. The shares of Kodak, a company that once dominated the photography industry worldwide, have experienced a dramatic rise in recent days. This rise, which is the kind that will bite the rises in altcoins seen in the crypto money markets, is directly related to the announcement of US President Trump that Kodak will start producing pharmaceutical active substances in the USA and will give the company a loan of 765 million dollars.

At a press conference at the White House, Trump pointed out that a large percentage of the drug ingredients are currently produced in India and China, but can be produced cheaper within the country, saying, "This agreement will be loaned to 765 million dollars under the Defense Production Act for the agreement we reached with Kodak. While the statement came on Tuesday, there was a large increase in the trading volume of Kodak shares on Monday. Prior to this increase, there were approximately 9,300 users holding Kodak shares in the popular stock trading application Robinhood. George Canboy, chairman of the asset management company Brighton Securities, who made an assessment of what happened at Kodak, said, "Last week the value of the company was $100 million. Now, the company has received a lifeline by way of a $765 million grant from the U.S. government to expedite the production of generic drugs — including those to fight COVID-19.

Using Money & Markets Chief Investment Strategist Adam O'Dell's stock rating system, we take a deeper dive into Eastman Kodak to see if the company is a buy for investors like you and me. While its shares jumped more than 440% on Wednesday, Adam's system rates Kodak a 37 overall — 63% of all other stocks rate higher. That "size" factor can help find market-beating gains in smaller stocks that trade with less liquidity. Growth — The company gets hammered in the growth factor, where it rates a 6 overall — 94% of all other stocks rated higher. As Adam's system points out, weaker cash flow, high volatility and negative earnings per share make Kodak a company investors should steer clear of. Kodak gets massive state-backing from the Trump administration to manufacture generic drugs inhouse and reduce its dependency on sourcing APIs from China. On Wednesday, July 29, Eastman Kodak Company (NYSE: KODK) stock saw a massive rally jumping over 300% in a single day. The massive Kodak stock rally comes as U.S. President Donald Trump announced a complete makeover of the company to now being a pharmaceutical producer. On Tuesday, the Trump administration announced a whopping $765 million loan to Kodak Pharmaceuticals. Kodak will now start producing active general pharmaceutical ingredients under the Defense Production Act. This move also aims to reduce America's dependency on foreign drug makers. On Wednesday, the Kodak stock witnessed wild trading during the market hours. Besides, trading on the New York Stock Exchange was halted 20 times due to massive volatility. Kodak CEO Jim Continenza told CNN that the company will take 2-3 years to build the new capacity. The Kodak stock has undergone a massive rally just in the last five trading sessions. If we just see the 5-day chart, the Kodak stock has surged from $2 to more than $46 on Wednesday. The generic drug shortage during the pandemic has got the Trump administration to re-think on setting up new facilities inhouse.