Shares of Eastman Kodak Company (KODK) closed today with gains of more than 300% at 33.20+25.26 (+318.14%). Why these gains for Eastman Kodak Company (KODK) stock?
Eastman Kodak Company (KODK) stock news
“(Bloomberg Opinion) — Kodak, the once-iconic photo company that’s been languishing for years, surprised the world this week by announcing a pivot into the pharmaceuticals business with a $765 million head start from the U.S. government. Somehow, that was enough to send the stock soaring more than 1,000% and add more than $1 billion to the company’s market value. Really? Let’s discuss.
The Defense Production Act loan, announced Tuesday, is part of a Trump administration effort to bring the manufacture of drug ingredients back to U.S. shores to reduce dependence on other countries and ensure consistent supply. It’s a reasonable if challenging policy goal. The loan and new business line for Eastman Kodak Co. isn’t, however, anything close to a justification for its massive share-price gains — whatever day traders and Robinhood investors may say.
Kodak is attempting to enter a low-margin commodity market with no particular advantage outside of the current administration’s industrial policy. Unless the government money spigot keeps flowing, it’s hard to imagine the company ever living up to its lofty valuation.”
Is it Kodak craziness, irrational exuberance, stock chasing, FOMO? Stocks go up but attention as they can go down as quickly as their meteoric rise. Investing in stocks is too risky when driven by speculation.
The CBOE Volatility Index (VIX) closed higher at 25.44+0.70 (+2.83%).
Eastman Kodak Company (KODK) gained more than 200%, closing at 7.94+5.32 (+203.05%).
“Kodak Triples on Loan to Make Covid-19 Drug Ingredients.
(Bloomberg) — Eastman Kodak Co. shares more than tripled Tuesday on a $765 million government loan to help produce ingredients used in key generic medicines to fight the coronavirus.
The development bank loan is the first of its kind under the Defense Production Act in collaboration with the U.S. Department of Defense. It’s intended to speed production of drugs in short supply and those considered critical to treat Covid-19, including hydroxychloroquine, the controversial antimalarial drug touted by President Donald Trump.
The money could provide a lifeline to Kodak, the storied photography giant whose business and shares were devastated by the switch to filmless cameras. Once a stalwart of American industry with a market capitalization above $30 billion, the company declared bankruptcy in 2012, forcing it into a series of attempted reinventions including forays into printers, film for movies and, briefly, cryptocurrencies.”
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