SEC investigating Kodak’s announcement of a $765 million government loan: report
The Eastman Kodak Co., headquartered in Rochester, New York, recently announced that it was receiving a $765 million loan from the federal government to manufacture drugs in its factories in the United States. And according to the Wall Street Journal’s sources, the Securities and Exchange Commission is investigating the company’s announcement of the loan.
Journal reporters Dave Michaels and Theo Francis note, however, that the SEC’s investigation “is at an early stage and might not produce allegations of wrongdoing by the company or any individuals.” SEC investigators, according to Michaels and Francis, are probing “how Kodak controlled disclosure of the loan, which began to emerge on July 27 — one day before the official announcement, causing Kodak’s stock price to rise 25% that day.”
Michaels and Francis explain: “News of the loan last week caused Kodak’s shares to rise as high as $60, before falling to about $15 on Monday due to a dilution in the shares. Amid the heightened volatility, trading volume has surged. The price spike briefly produced a potential windfall for company executives who owned stock option grants — some of which were granted on July 27, the day before the loan became public.”
Kodak has said that the details of the loan have not been finalized.
Contacted by the Journal, the SEC declined to comment on its investigation.
