- Kodak stock surged as much as 88% on Monday, boosting its market capitalization to north of $1 billion.
- A federal watchdog found no wrongdoing in the creation of the $765 million government loan earmarked to fund the camera maker’s shift toward manufacturing COVID-19 drug ingredients earlier this year, The Wall Street Journal reported.
- When news of the loan broke in late July, Kodak shares skyrocketed as much as 2,190% in two days.
- However, the launch of congressional probes and a SEC investigation meant the funding was swiftly put on ice.
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Kodak shares soared as much as 88% on Monday after a government watchdog found no problems with the process that created a $765 million federal loan to finance the camera company’s pivot toward making COVID-19 drug ingredients earlier this year.
The inspector general of the US International Development Finance Corporation, the agency behind the loan, delivered the results of his investigation to Sen. Elizabeth Warren in late November, The Wall Street Journal reported on Sunday. His assessment found no evidence of conflicts of interest or misconduct among the agency’s employees.
The DFC signed a letter of interest on July 28 to provide the $765 million loan to Kodak under the Defense Production Act, which requires companies to accept and prioritize government contracts for national security and other reasons.
Kodak said it would use the funding to launch a pharmaceutical division that would make generic-drug ingredients in critically short supply. Trump described the agreement as “one of the most important deals in the history of US pharmaceutical industries.”
News of the deal sent Kodak’s stock price up as much as 2,190% in two days, briefly boosting its market capitalization to north of $4.6 billion.
However, it plummeted within days after the Securities and Exchange Commission launched an investigation and Democratic politicians including Warren expressed concerns about the loan.
Kodak’s market cap rebounded to north of $1 billion on Monday.