Shares Dive After a Tweet About Kodak Loan

SEC is said to be investigating the announcement of the $765M deal
By Bob Cronin,  Newser Staff
Posted Aug 10, 2020 2:27 PM CDT
Shares Dive After a Tweet About Kodak Loan
The company's headquarters in Rochester, N.Y.   (Getty/wellesenterprises)

A tweet Friday hit Kodak hard Monday. "Recent allegations of wrongdoing raise serious concerns," the US International Development Finance Corp. posted. "We will not proceed any further unless these allegations are cleared." It was a reference to planned $765 million government loan that would allow Kodak to get into the drug business; shares are currently trading down 29% at $10.60 on the news that loan is now on hold, CNN reports. The allegations referred to in the tweet involve the timing of the loan announcement, which the SEC is reportedly looking into, the Wall Street Journal reported last Tuesday. TV stations in Kodak's hometown of Rochester, New York, reported the deal a day before the official announcement. The stations apparently were given no embargo, a restriction commonly placed on media outlets.

The SEC also is said to be looking into stock options granted to James Continenza, Kodak's executive chairman. After buying about 46,700 shares a month earlier, he received options for 1.75 million shares the day before the announcement. Within two days, the share price had surged from $2 to $60 in heavy trading, per NBC, though it was down to $14.88 by the end of trading on Friday. The loan is to help the onetime film giant begin producing drug ingredients, decreasing US dependence on foreign companies. Kodak offered a defense of Continenza's options grant in comments to the Journal last week, saying the point was simply to safeguard him against dilution and pointing out that he "has invested more capital in Kodak than he has earned during his tenure." (More Kodak stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.