As Xerox bemoaned its 35% revenue drop, in the US, Kodak shares soared as much as 1,900% in two days after the inkjet printer and plate company secured over AUD$1 billion of a government loan to produce generic-drug ingredients in response to the coronavirus pandemic. It's a remarkable turn-around that has made millions for long-suffering stockholders.
|Kodak CEO Jim Continenza - Kodak will play a vital role in defeating Coronavirus|
Kodak shares more than tripled on Tuesday, then jumped as much as 570%, to at least a seven-year high, on Wednesday. The group's market capitalization ballooned more than twentyfold, to about AUD$3.14 billion at one point.
US President Donald Trump on Tuesday described the Kodak agreement as "one of the most important deals in the history of US pharmaceutical industries."
The US International Development Finance Corporation said it would lend the cash to Kodak under the Defense Production Act, which requires companies to accept and prioritize government contracts for national security and other reasons.
Kodak said it planned to use the loan to launch a pharmaceuticals division to make essential drug components in "chronic national shortage," as defined by the Food and Drug Administration.
Pharmaceutical ingredients could eventually account for 30% to 40% of Kodak's business, CEO Jim Continenza told The Wall Street Journal.
Despite the loan being for a Pharma initiative, it will surely have a stabilising effect on Kodak’s Inkjet print and Offset & Flexo Plate business to – it’s the same company. Kodak did have a Healthcare division a while back, but this was sold off.
|(l-r) US International Development Finance Corporation CEO Adam Boehler, Kodak Executive Chairman Jim Continenza and Assistant to the President and Director of the Office of Trade and Manufacturing Policy Dr. Peter Navarro tour the manufacturing facility at Eastman Business Park.|
Kodak has worked with government before on national interest projects such as the Manhattan Project in WW2 and the Hubble telescope for interstellar photography.
The folks in Rochester must be doing handsprings and twerking right now.
Kodak's latest Prosper 520 Ultra inkjet press is sure to 'prosper' from a more stable, funded parent