The Kodak Pharma story continues to deepen:
“Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared,” the U.S. International Development Finance Corporation said in a tweet Friday.
The review of funding comes as the Securities and Exchange Commission is reportedly investigating how the company disclosed the deal with the government, according to a report from The Wall Street Journal. The probe is also reportedly expected to review stock options that were granted to executive chairman James Continenza ahead of the announcement. [NBC News]
This is getting more and more interesting. Never mind that the stock price has plunged from its high after the announcement. There may be criminal charges waiting for someone at the end of this story. And, besides the company execs, who in government is going to be caught with their hands in the cookie jar?
This mention of the app Robinhood is also interesting:
As news of the deal broke Kodak, which had been trading under $2, skyrocketed. Within two days, the stock was trading at $60, with 284 million shares changing hands. In the span of just 24 hours, more than 100,000 investors added the stock to their account on Robinhood, an app popular with millennial investors, according to data from Robintrack. The stock was so volatile the day after the announcement — at one point it was up more than 600 percent — that it was halted 20 times during the session.
But the momentum didn’t hold and on Friday the stock closed at $14.88, or 75 percent below its recent high. However, the current price is still more than 400 percent above where the stock traded ahead of the loan announcement.
It sounds like impulsive behavior was encouraged in this incident. I wonder how many people lost how much money on this. And while such things are learning moments for investors, it feels more like sheep being sheared.
