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Kodak - The Stock That Broke 20 Circuit Breakers In A Single Day

Jul. 31, 2020 6:35 AM ETEastman Kodak Company (KODK)
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Eastman Kodak Co (NYSE:KODK) recently won a government loan to produce ingredients that are used in critical generic medicines to battle the coronavirus. The company secured a $765 million loan under the Defense Production Act.

Their intention is to speed up the production of the drugs that are short in supply, specifically drugs that are critical for the treatment of Covid-19. Surprisingly, this is not Kodak’s first time getting involved in the drug sector. In 1990, Kodak was engaged in the production of drug ingredients. Consumers are familiar with Kodak because of aspirin.

Insiders own twenty percent stake, and during the past six months, have increased their shareholding by about 2.6%. The stock is highly popular among US retail investors. Many traders have been highly active since the beginning of the pandemic, and stock brokerage companies have experienced a massive demand over the past three to four months. Kodak’s stock valuation has soared to just under two billion, which is a remarkable comeback for the company. Prior to this, Kodak’s shares were devastated after the industry shifted from film to filmless cameras.

At the moment, Kodak is readying the production of ingredients for generic drugs, including the antimalarial drug hydroxychloroquine that some have said can treat the new coronavirus. Kodak, once a giant producer of film and cameras before the digital era, pivoted to turn itself into a materials and chemical company. It filed for bankruptcy in 2012 and emerged as a restructured business the following year. It would be very ironic to see if the company files for another bankruptcy within the 25 years of this loan, but as of now, we just have to wait and watch since it is too late to invest at this price.

In May, Eastman Kodak reported first-quarter consolidated revenue of $267 million and a GAAP net loss of $111 million.

Pre-market, the stock is up by another 21%

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