Kodak surges 1,900% in 2 days after securing a $765 million government loan to make drug ingredients
- Kodak shares surged as much as 1,900% in two days after the camera company was awarded a $765 million government loan to make drug ingredients in response to the coronavirus pandemic.
- The group said it planned to launch a pharmaceuticals division to make essential drug components in "chronic national shortage."
- President Donald Trump on Tuesday touted the agreement as "one of the most important deals in the history of US pharmaceutical industries."
- Kodak's stock price tripled on Tuesday, then rose as much as 570% on Wednesday.
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Kodak stock soared as much as 1,900% in two days after the camera company secured a $765 million government loan to produce generic-drug ingredients in response to the coronavirus pandemic.
Kodak shares more than tripled on Tuesday, then jumped as much as 570%, to at least a seven-year high, on Wednesday. The group's market capitalization ballooned more than twentyfold, to about $2.2 billion at one point.
President Donald Trump on Tuesday described the Kodak agreement as "one of the most important deals in the history of US pharmaceutical industries."
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The US International Development Finance Corporation said it would lend the cash 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 planned to use the loan to launch a pharmaceuticals division to make essential drug components in "chronic national shortage," as defined by the Food and Drug Administration.
Pharmaceutical ingredients could eventually account for 30% to 40% of Kodak's business, CEO Jim Continenza told The Wall Street Journal.
Kodak dominated the photographic-film market and boasted a market cap of nearly $30 billion in 1997. But it filed for bankruptcy in 2012 after the digital camera rendered many of its products obsolete — even though it invented the digital camera, according to The New York Times.
Kodak's revenue fell 6%, to $1.2 billion, in 2019, widening its pre-tax loss to $60 million.
