Kodak Leaked Massive Federal Drug Loan

The announcement sent the company’s stock price skyrocketing — but its shares were already unusually active.


A corporate titan of the pre-digital era roared back into headlines after the Trump administration announced that Kodak’s new pharmaceutical arm would receive a federal loan to produce ingredients for generic drugs.

The $765 million loan, made under the Defense Production Act invoked during the COVID-19 pandemic, will help Eastman Kodak overhaul and expand its facilities in the Twin Cities and upstate New York to make vital drug ingredients deemed by the FDA to be in short supply. Eventually, Kodak Pharmaceuticals aims to produce up to 25% of active ingredients for generic drugs — most of which are currently made overseas.

Kodak, a giant in photography before digital technology rendered its products all-but-obsolete, saw its stock price jump more than 10-fold following the news.

Wall Street observers, however, noticed an unusual amount of trading in the otherwise-stagnant stock on Monday — a full day before the announcement. The increase in volume and prices prompted speculation about insider trading, but the Wall Street Journal reported that the jump was, in fact, triggered by a clumsy media advisory from the company.

Kodak reportedly sent a heads-up about the loan to local TV stations in Rochester, N.Y., on Monday, but the notice reportedly did not include an “embargo” that typically accompanies sensitive news given out ahead of time. When reporters at two of the stations wrote articles and posted details on social media, Kodak informed them the announcement was not meant for publication — but by then, the company’s stock price was already on its way up.

The Journal also noted that the spike in trading activity probably wasn’t the result of any keen-eyed TV station Twitter followers; instead, the news was likely caught by monitoring algorithms deployed by investment firms.

The big winners, however, were last week’s Kodak stockholders, who saw the value of their stock climb from about $2 per share to as high as $60. The list includes CEO Jim Continenza, who reportedly added a cool $79 million to his net worth.

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