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Thread: Kodak's 530% stock surge is dangerous speculation

  1. #1
    Senior Member JohnLanders's Avatar
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    Kodak's 530% stock surge is dangerous speculation

    https://www.cnn.com/2020/08/03/inves...ble/index.html

    New York (CNN Business)It's a Kodak moment for investor insanity on Wall Street -- and the enormous run-up in Eastman Kodak's stock is yet another example of the current market frothiness.

    Shares of Kodak (KODK) are still up about 530% in the past five days -- even after big slides at the end of last week and a drop of more than 20% Monday -- following the news that the government will loan it $765 million to help produce drugs as part of a new pharmaceutical unit.
    But Kodak won't suddenly become the next Pfizer (PFE) or Merck (MRK) through this investment. While Kodak has experience producing chemicals for the film business, there is no guarantee that the company can easily morph into the decidedly different business of making pharmaceuticals.
    Plus, Kodak (which went bankrupt in 2012 and emerged from Chapter 11 a year later) has a history of trying to cash in on other hot trends. It launched KODAKCoin in response to the bitcoin and cryptocurrency craze in 2018, for example.

    And yet it appears Kodak has become a popular stock for younger day traders to buy and sell. According to data from Robintrack, a firm that follows holding patterns of traders using popular investing app Robinhood, Kodak is the most actively traded stock on the platform during the past week.

    The only stocks with a bigger following in the past month on Robinhood are Elon Musk's super-hot electric car company Tesla (TSLA), mega-cap techs Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN) and biotech Moderna (MRNA), which is working on a Covid-19 vaccine.
    The Kodak runup is reminiscent of the speculative surge in bankrupt companies earlier this year. Hertz (HTZ), JCPenney (JCP) and oil driller Diamond Offshore (DO) are just a few of the stocks that surged after Chapter 11 filings.
    "The market is more driven by retail [investors] in the short term than it has been in some time," said Jason Brady, president and CEO of Thornburg Investment Management, in an email to CNN Business.
    But that sugar rush may not last long. The big slide in Kodak's shares over the past few days could be a sign that short sellers -- investors who bet the stock will go down -- are borrowing more shares and selling them, pushing the price lower in the process.
    Other investors may be looking to lock in huge gains from the past week and are now dumping shares, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, in a report.
    Either way, the quick rise and sharp pullback in Kodak stock is yet another clear example that retail investors are trading for the short-term and not buying for the long haul.
    Thornburg's Brady described the popularity of stocks with poor fundamentals like Kodak as an example that the stock market has "jumped the shark."

    https://13wham.com/news/local/specia...l-loan-process

    Eastman Kodak said Friday it will appoint a special committee to conduct an internal review of the process surrounding the company's agreement to a potential federal partnership to produce pharmaceutical products.

    The special committee of independent directors has been appointed to oversee an internal review of what Kodak calls "recent activity by the Company and related parties in connection with the announcement of a potential loan by the U.S. International Development Finance Corporation."

    Last week, the company signed a letter of intent for a $765 million federal loan to help the company launch a new branch of the company called Kodak Pharmaceuticals to begin producing pharmaceutical products. The hope is that production in the U.S. will ramp up to the point where the country can produce 25% of active pharmaceutical ingredients for generic medicines. The company says 360 new jobs will be added in the process.

    The announcement sent Kodak's stock soaring, the price of shares quadrupling between the close of the market the Monday before the news and the morning of the following Wednesday. Trading had to be halted twice that Wednesday due to the increase in trading of Kodak stock.

    Earlier this week, U.S. Senator Elizabeth Warren, (D, MA) called for the Securities and Exchange Commission to investigate the rise in the price of the company's stock. The SEC has declined to comment on whether there is any potential investigation.

    Kodak CEO Jim Continenza regularly purchased Kodak shares with his own money since joining the company in 2013 and has not sold any shares during his time at Kodak, according to a company spokesperson.

    A spokesperson for Kodak says it intends to fully cooperate with any inquiries that are raised.

    Akin Gump Strauss Hauer & Feld LLP, a Washington D.C.-based legal and lobbying firm, will be conducting the internal review. Oversight will be provided by Jason New and William G. Parrett, both of whom sit on the Board of Directors for Kodak.

    Kodak said it does not intend to publicly comment any further during the review process.
    HUH What the hell this sounds like a joke on the surface because the last time people really paid attention to this company was before 2000's and because digital cameras were not widespread at that point. For the past 20 years you have a generation that has never heard of this company.

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    https://13wham.com/news/local/dfc-sa...k-deal-on-hold

    Rochester, N.Y. (WHAM) - The U.S. International Development Finance Corporation (DFC) says its deal with Eastman Kodak is on hold.

    On July 28, DFC signed a letter of intent with Kodak as part of a federal initiative to shift production of generic prescription drugs to the U.S.

    A $765 million federal loan through the DFC could be given to Kodak to produce pharmaceutical products in Rochester and at the company's facility in St. Paul, Minnesota.

    However, activity by Kodak and related parties prior to the announcement led to scrutiny and calls for an investigation into the possibility of insider trading.


    On Friday, the DFC released a statement on Twitter saying the recent allegations raise serious concerns.

    "We will not proceed any further unless these allegations are cleared," the statement read in part.

    A spokesperson for Kodak declined to comment on the news that the deal is on hold.

    Peter Navarro, director of the Office of Trade and Manufacturing Policy, tweeted that he is very disappointed that last week’s deal with Kodak was tarnished by allegations.

    Kodak announced on Friday that it will appoint a special committee to conduct an internal review of the process surrounding the company's agreement.

    13WHAM will update this developing story with more information as it becomes available.

    https://www.marketplace.org/2020/08/...cture-perfect/

    Kodak is one of those brand names people of a certain generation will remember, and those younger might not.

    Back in the days of yore, when you had to take the roll of film out of your camera and get it developed, Kodak was the photography company. But it didn’t survive the digital era, declaring bankruptcy in 2012.

    Now, in an unusual turn of events, it has been summoned to help produce pharmaceuticals related to COVID-19 treatment.


    Until about 10 days ago, Kodak’s place as a household name was going the way Blackberry and Blockbuster did. Then the Trump administration gave Kodak $765 million to produce chemical ingredients for COVID-19 treatments.

    Rosabeth Moss Kanter, professor of business at Harvard Business School, said it’s not as weird as it might sound.

    “Photography, I think, when it was invented was all about chemical baths, so Kodak had chemical roots,” she said.

    But many are raising their eyebrows. Like medical chemist and science writer Derek Lowe, who’s suspicious of what’s being heralded as Kodak’s big comeback. He said the company will have to compete with a global, and possibly cheaper, supply chain.

    “Production for generic drugs is not exactly the path to riches,” Lowe said. “They are going to be hard-pressed to produce a lot of these things at any kind of price that can compete with what we get now with offshore supply.”

    It’s hard to imagine this in the age of the selfie, but photography used to be something for special occasions and important people. Kodak became a household name because it made photography accessible to everyone.


    Kamal Munir, professor at Cambridge Judge Business School, has studied Kodak. He said it didn’t just sell photography. Kodak was photography.

    “In their heyday, they had close to 70% of the global market share of film,” he said.

    And Kodak’s failure to adapt to the smartphone era made it a relic. But will the pandemic change that?

    Some are having a hard time picturing it.

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    Apparently Kodak is claiming to go to Pharma Investments. But still it sounds like a penny stock gone crazy though.

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    Senior Member catastrophe's Avatar
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    Kodak is going to be making Covid-pharmaceuticals?

    Strange but very interesting.

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    Senior Member JohnLanders's Avatar
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    Quote Originally Posted by catastrophe View Post
    Kodak is going to be making Covid-pharmaceuticals?

    Strange but very interesting.
    Don't fall for this though. It sounds too much like the Theranos scandal the way the CEO of Kodak got investor to boost penny stock of the company and inflated it for daytraders. We don't need another Theranos in the height of COVID-19.


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    https://www.cnbc.com/2020/08/10/koda...estigated.html

    Shares of Eastman Kodak plunged more than 40% at the low on Monday after a federal agency said it was reviewing a previously announced $765 million loan for the onetime photography pioneer to produce drug ingredients.

    “Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared,” the U.S. International Development Finance Corporation said in a tweet Friday.

    The review of funding comes as the Securities and Exchange Commission is reportedly investigating how the company disclosed the deal with the government, according to a report from The Wall Street Journal. The probe is also reportedly expected to review stock options that were granted to executive chairman James Continenza ahead of the announcement.

    After the initial drop in early trading, shares recovered somewhat to trade 27% lower before briefly being halted for volatility.

    The stock has been on a wild ride since the funding was announced on Tuesday, July 28. But trading activity picked up the day before the official announcement, which raised some eyebrows on the Street.

    The day before the deal was announced the stock jumped 25%, and saw 1,645,719 shares exchange hands, far surpassing the average daily trading volume of 236,479 for the year prior, according to data from FactSet.

    As news of the deal broke Kodak, which had been trading under $2, skyrocketed. Within two days, the stock was trading at $60, with 284 million shares changing hands. In the span of just 24 hours, more than 100,000 investors added the stock to their account on Robinhood, an app popular with millennial investors, according to data from Robintrack. The stock was so volatile the day after the announcement — at one point it was up more than 600% — that it was halted 20 times during the session.

    But the momentum didn’t hold and on Friday the stock closed at $14.88, or 75% below its recent high. However, the current price is still more than 400% above where the stock traded ahead of the loan announcement.

    The loan, which was the first of its kind under the Defense Production Act, was meant to aid the company in its pivot to drug production. With the funding, Kodak said it would expand existing facilities in Rochester, New York and St. Paul, Minnesota under a new Kodak Pharmaceuticals arm, which would produce drugs to treat a wide variety of illnesses.

    “Our 33rd use of the Defense Production Act will mobilize Kodak to make generic, active pharmaceutical ingredients,” president Donald Trump said when announcing the deal. “We will bring back our jobs and we will make America the world’s premier medical manufacturer and supplier.”

    The president later walked back his comments, saying he was “not involved” in the loan.

    Kodak released the news to local reporters in Rochester, New York, where it is headquartered, on July 27 then asked several outlets that had picked up the story to delete it, which they did. According to a Kodak spokesperson, the company’s internal communications team “did not intend for the news to be published.”

    “We feel very comfortable that we’re going to get to the end game,” James Continenza, Eastman Kodak executive chairman, told CNBC’s “Squawk Box” after the deal was announced. “We signed a letter of interest and we’ve been working on this for a few months. We feel very comfortable,” he added.

    Filings with the Security and Exchange Commission show that on June 23 Continenza purchased roughly 46,700 additional shares. On the same date, board member Philippe Katz purchased 5,000 shares. Additionally, the day before the deal was announced the company granted Continenza options for 1.75 million shares, just under 29% of which vested immediately.

    White House economic advisor Peter Navarro on Friday praised the DFC for its move, saying he was “very disappointed” over the allegations.

    Sen. Elizabeth Warren, D-Mass., has called on the SEC to look into the trading that occurred prior to the official announcement.

    “There were several instances of unusual trading activity prior to the announcement, raising questions about whether one or more individuals may have engaged in insider trading or in the unauthorized disclosure of material, nonpublic information regarding the forthcoming $765 million loan awarded under the Defense Production Act,” Warren wrote in an open letter.

    The U.S. House Financial Services Committee has also called for an investigation into the company, citing “growing concern regarding insider trading.”

    Kodak has previously said that it would cooperate with any potential inquiries, and on Friday the company said it was launching an internal investigation.
    Now allegations of insider trading are at play here.

  8. #8
    Senior Member JohnLanders's Avatar
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    https://www.motherjones.com/politics...el-stock-gift/

    In late July, a wild chain of events occurred when the Trump administration decided to give Eastman Kodak, the film giant that went bankrupt in 2012, an unprecedented $765 million government loan through the Defense Production Act. Under this deal, which President Trump touted, the company would manufacture ingredients for an assortment of drugs, including hydroxychloroquine, the antimalarial drug Trump has repeatedly promoted—without scientific support—as a treatment for COVID-19. The agreement was officially announced on July 28, but the previous day, the price of Kodak’s stock began to surge, following local media leaks about the loan in Rochester, New York (the home of Kodak). This buying frenzy continued for a couple of days. During that time, billionaire investor George Karfunkel, a member of Kodak’s board of directors, made an unusual transaction: He donated 3 million Kodak shares—worth up to $180 million at the time—to a relatively new Jewish congregation that has almost no public profile.

    The out-of-the-ordinary loan for Kodak came from a new and little-known government agency: the US International Development Finance Corporation. This outfit was created to provide foreign aid—not domestic assistance—and it is headed by Adam Boehler, a former roommate of Jared Kushner. In March, Kushner tapped Boehler to be part of his shadow coronavirus task force.

    The Kodak deal is now under investigation by several House committees, which have raised questions about Kodak’s “lack of pharmaceutical experience” and about stock options handed to executives and board members right before the announcement. Sen. Elizabeth Warren (D-Mass.) has called for a probe of whether “one or more individuals may have engaged in insider trading.” In a letter to the Securities and Exchange Commission, she observed, “This is just the latest example of unusual trading activity involving a major Trump administration decision.” According to the Wall Street Journal, “In the wake of the wild trading, the SEC opened an investigation looking at the company’s disclosure of the preliminary agreement and the timing of options grants to Executive Chairman Jim Continenza.” (The SEC declined to confirm the existence of an investigation.) On Friday night, the International Development Finance Corporation tweeted: “Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.” In response, Kodak stock plunged nearly 30 percent on Monday.

    Kodak did not reply to a request for comment. It has created a special committee to conduct an internal review.

    The turbulent trading began on July 27, as news of the loan seeped out. Kodak’s stock opened at $2.13 and closed at $2.62, with 1,645,700 shares traded—more than 20 times the volume of previous days. On July 28, with the word now out officially, the stock opened at $9.63, hit a high of $11.80, and then dropped to $7.94, which was an almost four-fold gain from the start of the previous day, with a whopping 284,666,800 shares traded. The next day, July 29, was crazier. Kodak shares started at $18.43, and at one point reached an eye-popping peak of $60. Its low that day was $17.50, and it closed at $33.20, with 276,020,100 shares in play. But then investors realized that Kodak’s agreement was not yet a done deal, and over the next few days, the stock declined and stabilized in the $15 region.

    In the middle of this spree, Karfunkel, a major investor in Kodak, and his wife, Renee, donated those 3 million shares to an entity called Congregation Chemdas Yisroel, according to an SEC filing. They did so on July 29, the day the stock price hit $60, so those shares could have been worth as much as $180 million at the time of the gift. If the donation was executed at the end of the trading day, its value would have been $99.6 million. Given that Congregation Chemdas Yisroel is registered as a tax-exempt religious organization, the Karfunkels will be able to claim this donation as a tax deduction. That means they could pocket a deduction between $52.5 million and $180 million for a bloc of stocks that two days earlier was worth $6.39 million. (The donation also lowered the Karfunkels’ holdings in Kodak to 4.4 percent—which is below the 5 percent threshold that requires investors in a publicly traded company to report their stock transactions.)

    The gift to Congregation Chemdas Yisroel from Karfunkel, an Orthodox Jew who has supported various Orthodox schools and synagogues in Brooklyn, was noted in passing in media accounts of the Kodak stock frenzy. But what went unreported were details regarding the recipient of this immense gift. And it is tough to find any traces of this Congregation Chemdas Yisroel. It has no website. It is not listed on the synagogue locator of the Orthodox Union, a large support network for Orthodox congregations. There is no information on it within various online databases, beyond its existence as a corporate entity.

    Chemdas Yisroel was registered as a Delaware corporation in December 2018. Two weeks later, Chemdas Yisroel was registered with the New York Department of State as a Brooklyn-based entity. A search of Delaware corporation records for groups with the word “congregation” in their names yielded only 19 entities of which 10 appeared to be Jewish organizations. The New York State division of corporations lists hundreds of organizations that have “congregation” in their names and that appear to be Jewish.



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    The New York corporate registration for Congregation Chemdas Yisroel listed its address as that of an accounting firm in Brooklyn, Roth & Co., and Abraham Roth, the co-managing partner of the firm, was cited as a point of contact. Roth did not respond to multiple requests seeking comment about Chemdas Yisroel and Karfunkel’s massive donation.

    Karfunkel presides over at least two long-standing foundations that have supported Orthodox Jewish groups. The Karfunkel Family Foundation, of which he is a trustee, had $19 million in assets in 2018, and it donated $1 million total to six Orthodox Jewish organizations that year, according to its most recent available tax filings. This included a $150,000 donation to the Congregation Chemdas Yisroel. His Chesed Foundation of America—Karfunkel is its president—had $196 million in assets in 2018 and donated $2.4 million to “schools and synagogues.” The foundation’s tax filing that year did not list the individual recipients.
    George Karfunkel and his brother Michael were born in Hungary and grew up in Brooklyn, their father a fishmonger and a religious scholar, according to a Forward article published in 2016 when Michael died. (The headline: “Michael Karfunkel, the Orthodox Billionaire No One Heard Of, Dies at 72.”) Through a wide collection of businesses, they became one of the wealthiest American families. In 1976, George was on an Air France plane hijacked by Palestinian terrorists that was flown to Entebbe, Uganda, where Israeli commandoes mounted a rescue.

    A 2014 Foundation for Financial Journalism report recounted the Karfunkel brothers’ early days in finance:

    The brothers were employees at a mutual fund boiler room called Economic Planning Corp.; their bid to diversify the firm by having it engage in the capital markets ended with them at the center of a wide-ranging pump and dump scam that collapsed in 1971…[T]he Securities and Exchange Commission injunction and suspensions they received hardly set them back.

    The brothers went on to create their own financial powerhouse. In 2008, they sold their American Stock Transfer & Trust Co. for close to $1 billion. (In July 2019, Anne Neuberger, George Karfunkel’s daughter, was named head of the National Security Agency’s new cybersecurity directorate.)

    Both brothers have been highly regarded within the Orthodox community of Brooklyn for their philanthropy. According to the Foundation for Financial Journalism report, “Their foundations give almost exclusively to yeshivas and synagogues connected to Haredi Judaism, many of which are affiliated with the Belz Hasidic sect.” The report also noted that their foundations “employ risk in a fashion rarely seen in other private foundations,” and it outlined financial transactions mounted by the foundations involving complicated stock trades. And the Forward reported, “The charities the two brothers controlled are among the largest, and most unusual, Jewish private foundations in the country.”
    Even with this long history of philanthropy, George Karfunkel’s gift of Kodak stock to Chemdas Yisroel stands out as much greater—by a factor of 15 to 50—than the grants on the most recent tax filings of the Karfunkel Family Foundation and the Chesed Foundation of America. When Mother Jones called Henry Reinhold, the accountant listed on the tax returns for these two foundations and an officer of each one, the man who answered the phone would not identify himself but demanded to know the subject of the inquiry. When told it was about the Karfunkel Family Foundation, he hung up. A subsequent call went to voicemail, where there was a recorded greeting from a person who referred to himself as Henry Reinhold in a voice similar to that of the man who moments earlier had refused to provide his name.

    What happened to the 3 million Kodak shares after Karfunkel and his wife donated them to the congregation? Were they sold? If so, at what price? How might this organization—with no publicly identified officials—use a windfall of tens of millions of dollars or much more? There are no answers. The public trail ends with the stock transfer.

    Mother Jones sent Karfunkel a list of questions regarding Congregation Chemdas Yisroel and his gigantic contribution of Kodak shares. In a brief phone call, his assistant told Mother Jones, “It’s on his desk.”

    Karfunkel did not reply.

    UPDATE: After the above story was published, the Wall Street Journal also reported on George Karfunkel’s donation of Kodak shares to the Congregation Chemdas Yisroel. The newspaper noted that Garfunkel is listed as the president of the synagogue in New York State charity-registration records. It reported that this donation “would make it the single largest gift recorded to a religious group, based on a list maintained by the Chronicle of Philanthropy.” According to the Journal, “The New York paperwork describes the congregation as an Orthodox Jewish synagogue that conducts religious services, classes, lectures and seminars, and would use any funds raised only for religious, charitable and educational purposes. The congregation appears to have a small space attached to a three-story apartment building on a quiet side street in the ultra-Orthodox Jewish neighborhood of Brooklyn’s Borough Park. A small nameplate on the building’s exterior is the only visible sign of its location.” In its charity registration records, the congregation lists Reinhold as its secretary and Roth as its director. With Karfunkel, they are the only officers of Chemdas Yisroel. Karfunkel is also listed as the “Chief Financial Officer or Treasurer.”

    Mother Jones illustration; Michael Reynolds/CNP/ZUMA; Getty
    https://www.motherjones.com/politics...el-stock-gift/

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    https://www.reuters.com/article/us-e...-idUSKCN2572QD

    (Reuters) - Eastman Kodak Co (KODK.N) said on Tuesday it expects sales volumes and working capital to improve in the current quarter after reporting a 31% decline in quarterly revenue due to the COVID-19 pandemic, sending its shares up 7%.

    The photographic equipment maker’s stock plunged on Monday after the U.S. government blocked a $765 million loan to the company, which was going to make drug ingredients for use in possible COVID-19 vaccines, because of “alleged wrongdoing” by executives.

    Kodak said on Tuesday investigations by the U.S. Congress and the Securities Exchange Commission have commenced, and could impact the outcome of the loan from the U.S. International Development Finance Corp.

    Senior Democratic lawmakers had asked federal regulators to investigate securities made by the company and its executives around the time it learned it could receive the government loan.

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    https://www.cnbc.com/2020/09/01/koda...e-company.html

    Eastman Kodak’s recent roller-coaster ride continued on Tuesday with shares jumping as much as 65% on the back of D.E. Shaw establishing a position in the company.

    A filing with the Securities and Exchange Commission on Monday night showed that the hedge fund has a 5.2% passive stake in Kodak. However, D.E. Shaw is a quantitative trading firm meaning the stocks they buy and sell are not necessarily aligned with the company’s long-term view of a particular stock. In other words, their new position could simply be a short-term trading bet.

    During early trading Kodak jumped 65% to hit a session high of $9.87. But the stock retreated from that level throughout the day and wound up closing at $7.30 for a gain of 22.07%.

    Shares of Kodak have been highly volatile over the last month — rising dramatically after the Trump administration said it would loan the company $765 million to pivot into drug production, and then cratering after the loan was sidelined following regulatory and congressional scrutiny. Prior to the announcement shares traded around $2.10. Just three days later, they touched $60. Since then they’ve moved steadily lower, and on Monday closed at $5.98.

    The $765 million lifeline for the onetime photography pioneer was officially announced on Tuesday, July 28. But the stock jumped more than 20% the prior day on heavy trading volume, leading some on the Street to question how the letter of interest between Kodak and the DFC was disclosed. Additionally, securities filings show that company executives were granted stock options prior to the announcement when discussions were already underway.

    Kodak is now under investigation by the SEC, and the DFC said in August that the “recent allegations of wrongdoing raise serious concerns.” The governmental agency said it would “not proceed any further unless these allegations are cleared.”

    Senator Elizabeth Warren has called for an investigation into why the loan was granted to Kodak in the first place.

    “The fiasco surrounding the decision to offer, then revoke, the Kodak loan also raises larger questions about corruption, nepotism, and mismanagement in the Trump Administration’s response to COVID-19,” Warren wrote to Michael Horowitz, acting chair of the Pandemic Response Accountability Committee on August 20.

    “It is not at all clear why President Trump, in his Executive Order, chose to give the DFC ... this new loan authority — but the mismanagement of the Kodak loan raises new concerns that it may be fundamentally unsuited to the task,” it added.

    The democratic senator from Massachusetts previously called for an insider trading investigation. “There were several instances of unusual trading activity prior to the announcement, raising questions about whether one or more individuals may have engaged in insider trading or in the unauthorized disclosure of material, nonpublic information regarding the forthcoming $765 million loan awarded under the Defense Production Act,” she wrote in an open letter dated Aug. 3.

    Condemnation of the dubious trading and executive purchases isn’t confined to Democrats. White House trade advisor Peter Navarro blasted Kodak executives on for their handling of the loan announcement.

    “Based on what I’m seeing, what happened at Kodak was probably the dumbest decisions made by executives in corporate history,” Navarro said Aug. 17 on CNBC’s “Squawk Box.”

    During the company’s second quarter earnings call Kodak executives reiterated that the deal was a letter of interest, meaning it had not been finalized. Executive Chairman Jim Continenza said that the deal needed more work.

    In August Kodak announced an internal investigation.

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