Eastman Kodak is one of the latest companies to join the battle against the coronavirus. While other companies like GE, Tesla, and Ford have all committed their support to provide resources in the US, Kodak shares exploded higher on Wednesday after President Trump announced a deal to work with the photography pioneer to generate ingredients in generic drugs that could help stem the coronavirus pandemic. Russell ETFs with the company rallied amid the news.
Shares of Kodak last traded up about 410% to about $40 a share after surging as much as 570%, resulting in over 10 trading halts on Wednesday due to explosive volatility.
“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.”
Two ETFs with Eastman Kodak are benefitting from the moves in the stock this week. The ProShares UltraPro Russell 2000 (URTY) is up 4.57%, while the Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) climbed 1.78% Wednesday.
Kodak said Tuesday it will create pharmaceutical components that have been shown to be critical but in short supply, as defined by the Food and Drug Administration.
The surge in stock price drove Kodak’s market value to $347 million as of Tuesday’s close, up from a market value of about $115 million, and could be up more than 1000% this week depending on Wednesday’s close, to reach a market cap over $1 billion.
“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.”
The explosive moves in Kodak and the shift to drug production are a remarkable opportunity for the 131-year old imagining company, which filed for bankruptcy in 2012 as the shift to digital cameras damaged the traditional business model.
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