Kodak (NYSE:KODK) – formally known as the Eastman Kodak Company – has seen its fortunes reverse in a dramatic fashion over the course of this week. The erstwhile camera-focused company is now set to become a biotech powerhouse with the full blessing of the American government, unleashing an eye-popping rally in its shares.
As of 08:19 a.m. ET, Kodak’s stock is up another 22.89 percent in the pre-market, currently trading at the $40.80 price level. Relative to the Monday’s closing price of $2.62, the stock has now rallied an astonishing 1,457 percent!
So, what has spurred such a dramatic rally in Kodak’s share price? Well, on the 28th of July, the Trump administration announced that it would grant a $765 million loan to Kodak. This funding would be used by the company to ramp up the production of key ingredients used by the pharmaceutical industry, thereby, slashing America’s reliance on China and India for these products. As per the details, Kodak will receive the earmarked loan from the U.S. International Development Finance Corp. (DFC) – a new foreign investment agency that is attempting to build a strategic stockpile of essential medical supplies in collaboration with the Department of Defense (DoD). Adam Boehler, the head of the DFC, said on the occasion:
"It's unacceptable going forward that American pharmaceuticals – the generic form of pharmaceuticals – are made in China and outside of the United States."
Kodak will now utilize its expertise in crafting chemicals for the camera film in order to manufacture key pharmaceutical ingredients. The company would eventually produce at least a quarter of these essential raw materials currently being imported from abroad.
As with all momentum-driven rallies in the current paradigm, the announcement soon caught the attention of the Robinhood traders, who piled into the Kodak stock in droves. As an illustration of the wild mania surrounding Kodak shares, the stock was halted 14 times on Wednesday as it continued its inexorable march toward the stratosphere. The following image, sourced from Robintrack, illustrates the soaring interest in the stock among Robinhood traders.
So, how far can this rally go? Yesterday the stock went as high as $60 before closing at $33.20. In the pre-market today, Kodak shares have already breached the $40 price level. Consequently, we would not be surprised if the stock touches yesterday’s high again today. Nonetheless, due to the heightened volatility, we would like to caution potential traders against jumping headlong into this momentum-driven play without conducting due diligence.
The post Kodak (NYSE: KODK) Shares Poised to Add to Their 1,457 Percent Gain Since Monday by Rohail Saleem appeared first on Wccftech.
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