Shares of the former film giant Eastman Kodak (NYSE: KODK) it exploded outside the gate this morning, spiking up 83% before pausing to catch my breath and go back a bit. However, at 11:20 am EDT on Wednesday, the stock was still up at 37.8%.
And all because of something Eastman Kodak said.
Such as The Wall Street newspaper A committee hired by Eastman Kodak’s board to investigate the circumstances surrounding the company’s acceptance of a $ 765 million loan from the US government in July reportedly found that Kodak did not break the law. law.
The loan was intended to help Kodak produce pharmaceutical ingredients to fight the coronavirus and sparked a rally in Kodak shares, even before the loan was officially announced. The ensuing investigation focused on theories that insider trading could have been encouraged by leaks within the company and that Kodak could have offered stock options to senior executives prior to the announcement of the loan, to enable them to profit from it. But the special committee, hired through Kodak’s Akin Gump law firm, found no such wrongdoing.
But there is still the matter of the federal investigation of the company. Just yesterday, for example, the magazine reported that the inspector general of the US International Development Finance Corporation (IDFC) is opening a review of the loan. And that’s on top of ongoing investigations by the Securities and Exchange Commission and several congressional committees.
There is no guarantee that these other investigations will come to the same conclusions drawn by the Kodak probe itself. Meanwhile, the IDFC has suspended payment of the loan amount to Kodak and the money is unlikely to be released until these other investigations are closed.