Kodak (KODK) Skyrockets 70% as Regulators Find no Wrongdoing

Shares of the Eastman Kodak Company (NYSE: KODK) are trading 72% higher in pre-open Monday on news that federal regulators found no wrongdoing in getting a loan from the government.

The Wall Street Journal reported that the inspector general of the agency that brokered the deal - the U.S. International Development Finance Corp. (DCF) - said that he didn’t find “any evidence of misconduct on the part of DFC officials.”

The assessment report has been delivered to Senator Elizabeth Warren last week, who initially asked for the investigation to take place. Following her request, the DFC decided to put the loan on indefinite hold.

“We focused our review on issues within DFC [office of the inspector general’s] purview and authority. We did not review conduct by Kodak or non-DFC personnel,“ DFC inspector general, Anthony Zakel, said.

Eastman Kodak, a one-time photo giant, received a $765 million loan in July from the DCF to launch a new pharmaceutical venture in a bid to curb the spread of Covid-19 virus.

Kodak said it would produce ingredients for some generic drugs, including the antimalarial drug hydroxychloroquine, which was promoted by a part of the Trump administration as a treatment for the coronavirus.

The DFC was "reasonable" to consider Kodak’s application for a loan, Zakel wrote.

“The record is abundantly clear and the independent IG review confirms that DFC followed its standard process, under its standard timeline, driven by career finance professionals,” a DFC spokesman told WSJ.

Zakel added that the agency will continue to review projects approved under the “Defense Production Act”, including those that facilitated market moves in the publicly-listed companies.

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