Kodak stock price surges over 500% as analysts doubt over deal

By
Alec Padua
-
Kodak stock price surges over 500%, analysts doubt over deal

Kodak just received a US$756 million [AU$1.06 billion] loan from the U.S. government, and the massive stock rally has analysts skeptical about it.

With no prior pharmaceutical experience, the film and camera company will be challenged in producing medical equipment for its citizens.

Invoking the power of the Defense Production Act, President Donald Trump has assigned Kodak to be one of the top medical manufacturers.

This year, the POTUS also had tensions with 3M for violating the Defense Production Act, and it looks like he has found a new ally.

Kodak top executive lands deal on an “understanding”

As per Reuters, Eastman Kodak executive chairman and CEO James Continenza was granted options for 1.75 million shares due to an “understanding” with its board that wasn’t in his employment contract, nor it was publicly disclosed.

The options deal happened before the official loan announcement of the Trump administration. Now the shares are worth over 500% since the last price on July 27 at $2.62 per share.

MSNBC’s Stephanie Ruhle also got skeptical over the Kodak deal, for there are a lot of pharmaceutical companies in the U.S. where the POTUS can exercise the Defense Production Act.

She also added that Kodak filed for bankruptcy last 2012 and tried to venture out in other industries such as cryptocurrency after failing to catch up with the hot digital trends.

Another dangerous speculation lies ahead

The recent rise of Kodak reminds traders and investors of the bullish rally of companies this year that filed for bankruptcy like Hertz and Whiting Petroleum.

President and CEO of Thornburg Investment Management Jason Brady said in an email to CNN Business:

“The market is more driven by retail [investors] in the short term than it has been in some time.”

As per Robintrack, a site where it records most actively traded stocks in Robinhood, Kodak is currently part of the top 100 traded stocks ranking at 84.

With the recent Dogecoin hype that happened this year, Robinhood retailers may be either taking or holding profits off Kodak.

Featured image courtesy of analogicus/Pixabay

Micky is a news site and does not provide trading, investing, or other financial advice. By using this website, you affirm that you have read and agree to abide by our Terms and Conditions.
Micky readers - you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.