After Eastman Kodak received a $765 million loan from the government to produce drug ingredients, the Securities and Exchange Commission is reportedly investigating some of the details.
The probe is focused on how the deal was disclosed, the Wall Street Journal, reported, citing anonymous sources. Kodak’s stock rocketed to $60 after news of the loan broke, gaining more than 2,100%. It has since dipped to about $14.40 a share.
Reached for comment, a Kodak spokesperson said the company would “fully cooperate” with any potential investigation. The company also pointed out that the loan agreement is not finalized.
President Donald Trump announced the deal last week during a White House press conference. “Kodak will now produce generic active pharmaceutical ingredients, which is a big deal, using advanced manufacturing techniques,” he said. “Kodak will also make the key starting materials that are the building blocks for many drugs in a manner that is both cost-competitive and environmentally safe will be competitive with almost all countries.”
Trump also said that this partnership will produce about 25% of all active ingredients needed to make generic drugs in the U.S. But shares of Kodak rose 25% before the announcement was public. Yesterday, Senator Elizabeth Warren of Massachusetts publicly called for the SEC to investigate the circumstances.
According to WSJ, the SEC is still in the early stages of its investigation.