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Kodak headquarters in Rochester, New York http://www.industryleadersmagazine.com/eastman-kodak-moves-towards-bankruptcy-hires-jones-day/
A company that used to be a force to be reckoned with, a classic blue-chip stock that has seemed to disappear during the recent days. Kodak, a company most millennials wouldn’t even recognize today has been a hot commodity on the market for the past month.
Kodak was founded in 1888 as a photography company and continued to gain popularity throughout the 19th century due to its innovative camera and film technology. In 1930, Kodak was added to the Dow Jones Industrial Average Index (DOW), a composition of 30 of the top stocks. Kodak remained in the DOW until 2004, proving its consistency over time. However, rival technology companies caught up with Kodak over time and by 2004, Kodak was no match for companies such as Apple or Amazon. From 2004, the blue-chip giant eventually faded into a small little-known company and eventually filed for Chapter 11 bankruptcy in 2012. The re-organized company eventually emerged from bankruptcy in 2013, however, the company was never able to fully financially recover. The company continued to fade out of the public eye until July 27th, 2020.
On July 27th, Kodak’s stock price suspiciously jumped roughly 25% from $2.10 to $2.62. The next day, news came out that Kodak was going to receive a $765 million loan from the federal government in order to produce drugs to help combat COVID-19. Over the course of just less than a week, the micro-cap company stock price jumped from $2.62 to as high as $60.00 purely off the hopes of the loan news. After reaching a 52 week high of $60.00 the company spiked downward to $33.20 by the end of the trading day on July 29th. Kodak was still up a significant amount of over 1,000% over the course of 2 days.
After a couple weeks of the stock price slowly trickling down after the unbacked hype, news was revealed that Kodak was subject to insider trading due to the suspicious rise in the stock price on July 27th before any news of the loan came out. On August 10th, the stock crashed as much as 43% down to under $10. This was due to the news that Kodak’s $765 million loan was put on hold after an investigation was opened to review the status of insider trading on Kodak’s stock. This caused the stock price to plunge even more until where it sits at about today at $6.50, still up 154% prior to the news of the loan. However, nowhere close to the where the peak of the stock. Kodak will likely eventually fade out of the public eye once again to where it was before as the loan has been halted. The week of the insane trading of Kodak is over and will likely never reach where it was at before.
Very interesting take on the company. In your opinion, would you like to see Kodak resurface yet again, in any way shape or form? For me, I think that the fact a company can fade out of the public eye for years, then resurface slowly to be in the public eye again is quite genius. I also think its crazy that Kodak took a completely different route after fading, helping produce drugs for COVID. Hey, drugs or cameras, they’re still sort of on the market, and I think that’s all they care about.
I like how you explained Kodak’s progression over the years and how it had been strong for so long but was eventually pushed out by newer companies to the point of bankruptcy. It’s also remarkable how suddenly these prices can change. Kodak had been flying under the radar for a few years, and it regained some attention overnight with the mere rumor of a loan. Even after the insider trading allegations, it is still temporarily more valuable than it was before because of the new attention that it received.
Jayden,
I admire your strategic method of writing and how you bled facts into your perspective. You made great points and chose a very relevant topic that many people often overlook. This post was very organized and thorough nonetheless. Awesome!