Kodak falls 40% on the New York Stock Exchange after the suspension of the agreement to produce drugs

New York, Aug 10 (EFE) .- The photographic products company Eastman Kodak fell 40% on the New York Stock Exchange on Monday after the US government suspended an agreement to produce generic drug ingredients in response to the COVID-19 pandemic, among allegations of insider trading.

The US International Financial Development Corporation indicated this weekend that these “allegations of misconduct create serious concerns” in the federal government, which will not “proceed until clarified” with the $ 765 million loan for produce pharmaceutical ingredients, which aimed to stop depending on the outside to manufacture them.

On July 28, US President Donald Trump cited the Defense Production Act to announce the millionaire loan to Kodak, which declared bankruptcy in 2012 when the switch to digital cameras devastated its business. This generated confusion among analysts and a great movement in the market, where it shot up 600% in two days.

The firm came under scrutiny from lawmakers, who expressed fear over the “lack of pharmaceutical expertise” of Kodak, a producer of chemicals used in photography, and the allocation of stock options to its top management just before the deal was announced. with the Government, according to The Wall Street Journal.

The Securities Market Commission (SEC) is investigating the disclosure of the agreement by Kodak and that transfer of options, since the day before the announcement of the Government their titles rose 25%, with a trading volume six times greater than the usual, which generated suspicions of “insider trading” (insider trading).

After Trump’s announcement on July 28, Kodak shares, which had been trading below $ 2 until then, soared and reached $ 60 in two days, rising 600%, which led to suspend its negotiation a score of times, indicated the economic medium CNBC.

The papers stabilized during the following days and, after closing last Friday at less than 15 dollars, this Monday they fell more than 40% after the opening of Wall Street, in reaction to the suspension of the agreement to produce drugs.

Nearly two hours after the start of today’s session, Kodak had recovered some value but was down more than 30%, standing at $ 10.23 per share.

(c) EFE Agency