Shares from the former camera film giant Eastman Kodak (NYSE: KODK) exploded out of the gate this morning, rocketing 83% louder before stopping to catch her breath and retreating slightly. As of 11:20 EDT on Wednesday, however, the stock was still very much up at 37.8%.
And all because of something Eastman Kodak said.
As Wall Street Journal reported this morning, a committee hired by Eastman Kodak’s board to investigate the circumstances surrounding the company’s acceptance of a $ 765 million loan from the U.S. government in July found that Kodak did not break any laws.
The loan was to help Kodak produce pharmaceutical ingredients to fight coronavirus, and it sparked a demonstration of Kodak shares – even before the loan was officially announced. The investigation that followed centered on theories that insider trading may have been prompted by information leaks in the company and that Kodak may have given stock options to high-level executives before the loan was announced to enable them to take advantage of it. But the special committee employed through Kodak’s law firm Akin Gump found no such offense.
But there is still the issue of federal investigations of the company. Just yesterday for example Journal reported that the Inspector General of the US International Development Finance Corporation (IDFC) is opening a review of the loan. And this is on top of ongoing investigations conducted by the Securities and Exchange Commission and several congressional committees.
There is no guarantee that these other studies will reach the same conclusions that Kodak’s own probe has drawn. Meanwhile, IDFC has suspended the payment of the loan amount to Kodak, and the money is unlikely to be released until these other investigations are completed.