Kodak Stock Surge 60% After Trump Announced Deal With The Company

On Tuesday, after President Donald Trump announced that he would be partnering with Eastman Kodak, the photography pioneer, the company's stock skyrocketed. According to the President, Kodak would be producing ingredients in generic drugs in response to the ravaging coronavirus pandemic. 

Eastman Kodak shares rose more than 60% in extended trading after the announcement of the deal. The company's stock value practically tripled after it was awarded a $765 million loan by the US government to start producing ingredients for drugs that would be used to contain the coronavirus pandemic. This would be produced under the Defense Production Acts. The deal, according to a news report, is the first of its kind 

"Our 33rd use of the Defense Production Act will mobilize Kodak to make generic, active pharmaceutical ingredients, " Trump said in a press conference Tuesday evening. "We will bring back our jobs and we will make America the world’s premier medical manufacturer and supplier."

After the announcement, Kodak reported that it would be producing some pharmaceutical component that has been identified as a good treatment for the ravaging coronavirus pandemic. The company revealed that these pharmaceutical components have been defined by the Food and Drug Administration but are currently in shortage. 

Before the deal with the government, Kodak company's stock valued at $115. After the announcement, the stock price skyrocketed to $347.

The company, however, revealed that it would be expanding some of its existing facilities under a new Kodak pharmaceuticals arm. The facilities that would be expanded include Rochester, New York, and St. Paul, Minnesota.

“Kodak is proud to be a part of strengthening America’s self-sufficiency in producing the key pharmaceutical ingredients we need to keep our citizens safe,” Kodak Executive Chairman Jim Continenza said in a statement. “By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”

In 2012, when Kodak shifted to digital cameras, this affected the company's such that it filed for bankruptcy. It was after this that Kodak,  the one-time leader in film and production, moved to drug production. For about 8 years now after filing for bankruptcy, the company has been struggling to keep its business afloat. 

The new deal would not only expand the company horizon but also its overall success. This is already evident in the increase in the company's stock.