Reuters / Steve Marcus
- Shares in Eastman Kodak tanked in Monday’s market trading after the US International Development Corp put its $765 million on hold last week.
- On July 28, the company announced it was getting a $765 million loan from the DFC to aid it in producing drug ingredients.
- The news led to its stock to explode by as much as 2,190% the next day.
- The Securities Exchange Commission announced last week that it was investigating the firm on its extraordinary stock growth and whether any insider trading took place, as shares traded up 26% in market before the announcement was made.
- Visit Business Insider’s homepage for more stories.
Shares of Eastman Kodak faced a bitter sell-off Monday, tanking over 30% on reports that its $765 million loan to produce pharmaceutical ingredients has been put on hold.
Kodak’s share price was down 32% at $10.32 as of 09:53 a.m ET.
This follows news that the Securities Exchange Commission is investigating the trading of Eastman Kodak stock after the price surged more than a week ago on news of the government loan.
The US International Development Finance Corp said in a tweet Friday: “On July 28, we signed a Letter of Interest with Eastman Kodak. Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.”
The loan, intended to support Kodak, a technology and pharmaceutical company, in producing drug ingredients, was announced on July 28. However, the shares had already rallied by around 25% the previous day.
After the announcement, Kodak stock leaped as much as 350%. Its shares soared even higher the day after at once point reaching a two-day gain of 2,190% to reach $60 a share.
In a letter last week, Sen. Elizabeth Warren said agencies should investigate “several instances of unusual trading activity prior to the announcement of this deal.”
“This is just the latest example of unusual trading activity involving a major Trump administration decision,” Warren wrote.
Warren said the vast increase in the value of Kodak’s stock could have been caused by premature publication of the news of the loan.
The Wall Street Journal reported that local media in Kodak’s hometown of Rochester, New York may have published tweets and stories that could have alerted traders to the news.
Real Life. Real News. Real Voices
Help us tell more of the stories that matterBecome a founding member
Subscribe to the newsletter news
We hate SPAM and promise to keep your email address safe