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Eastman Kodak Co. shares (NYSE: KODK) in two days last month skyrocketed more than 1,100 percent, and plummeted 50 percent a few days later. Share price continues to fall following a blunder by Kodak leaders and an investigation by the U.S. Securities and Exchange Commission.
On Monday, shares were down again to $7.76 following White House trade adviser Peter Navarro criticizing Kodak management for their “stupidity” on CNBC.
“Based on what I’m seeing, what happened at Kodak was probably the dumbest decisions made by executives in corporate history,” Navarro said. “You can’t fix stupid. You can’t even anticipate that degree of stupidity.”
A spokeswoman for Kodak said “no comment” in response to Navarro’s criticism.
The criticism and SEC investigation stem from a possible leak of the loan announcement and the timing of stock awards to Kodak leaders, including Executive Chairman James Continenza. Continenza was issued 1.75 million stock options by the board the day before a $765 million loan announcement, triggering an outcry from analysts and investors.
On July 28, the U.S. International Development Finance Corp. (DFC) and Kodak had signed a letter of intent that would allow the photo giant to shift gears and begin producing generic drugs here. But the DFC within days put a hold on its loan in light of the SEC investigation.
On Aug. 10, White House Press Secretary Kayleigh McEnany said President Trump had used the Defense Production Act “more than 30 times” to increase production and is aware of the “Kodak allegations.”
“Would he pull the plug on this deal? I’ll leave that to the president, but he takes these (allegations) very seriously,” McEnany said. “We won’t speculate as to what this investigation finds.”
Share price has ranged from $2.62 on the day before the official announcement to a one-time high of $60, with a July 29 closing price of $33.20. The stock has continued to fall throughout August as Kodak performs its own internal investigation into the matter.
Last week the company reported a lackluster second-quarter. For the quarter ended June 30, Kodak reported a $94 million sales decline to $213 million and a net loss of $5 million. Kodak ended the quarter with a cash balance of $180 million, down from the March 31 balance of $209 million.
“Kodak continued to navigate the challenges posed by the pandemic during the second quarter,” Continenza said. “Although the print industry slowdown impacted our performance, we continued to serve our customers and furthered our long history of innovation through the launch of six new print products.”
The company did not offer full-year guidance nor address the DFC loan.
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