At the end of July, the Trump administration announced a lucrative $765 million financing deal for the photo company Kodak to produce pharmaceutical APIs. The decision, once public, skyrocketed the company’s stock, making a lucky few an astronomical profit. However, an investigation into recent allegations of wrongdoing by federal regulators has put the deal on hold and plunged the stock down near its original level.
After the deal was announced on July 27, Kodak’s stock surged from around $3 a share to $33 a share - an increase of over 1000 percent. After the initial rise, corrections and speculation about a potential investigation started the downward spiral, going from its high of $33 down to under $15 by August. When the investigation was made public and the deal was put on hold, the stock continued to fall to where it is as of August 10 at around $10.70.
The investigation centers around actions made by executives once they learned about the government’s proposed deal. Securities transactions completed before the deal went public could be illegal.
