A pre-digital titan made headlines this week after the Trump administration announced that Kodak’s new pharmaceutical arm would receive a federal loan to produce ingredients for generic drugs.
The $ 765 million loan, made under the Defense Production Act invoked during the COVID-19 pandemic, will help Eastman Kodak renovate and expand its facilities in the Twin Cities and upstate New York to make vital drug ingredients deemed rare by the FDA. . Ultimately, Kodak Pharmaceuticals aims to produce up to 25% active ingredients for generic drugs, most of which are currently manufactured overseas.
Kodak, a photography giant before digital technology made its products nearly obsolete, has seen its stock price jump more than 10 times in the wake of the news.
Wall Street watchers, however, noticed an unusual amount of otherwise stagnant stock trading on Monday – a full day before the announcement. The increase in volume and prices sparked insider trading speculation, but the Wall Street Journal reported that the jump was actually sparked by a clumsy media advisory from the company.
Kodak reportedly sent a notice of the loan to local television stations in Rochester, NY, on Monday, but the notice reportedly did not include an “embargo” that typically accompanies sensitive information released in advance. When reporters from two of the stations wrote articles and posted details on social media, Kodak informed them that the ad was not meant to be published, but at that point the share price of the company was already on the rise.
The Journal also noted that the spike in business activity was likely not the result of sharp-eyed Twitter subscribers to a TV channel; instead, the news was likely picked up by the surveillance algorithms deployed by investment firms.
The big winners, however, were Kodak shareholders last week, who saw their stock value climb from around $ 2 per share to $ 60. The list includes CEO Jim Continenza, who is said to have added $ 79 million to his net worth.