Kodak's stock skyrocketed this week after it was announced that the company would expand into pharmaceuticals, CNN reports.
However, suspicions of insider trading arose after some noticed that an unusual number of shares were traded a day before the announcement. Journalist Judd Leglum tweeted that it all has the potential makings of a "major scandal."
When asked about the unusual activity, Kodak CEO James Continenza denied any wrongdoing.
“I mean obviously this has been a pretty tight kept secret even until the last day,” he said. “I couldn’t tell you what influenced that [the volume] or didn’t ... we knew for over a week.”
But that didn't stop people from speculating that someone knew something ahead of the official announcement.
The Trump administration confirmed the shift Tuesday night, stating the federal government had given the once-mighty camera company a $765 million loan for drug ingredients production. President Donald Trump said the loan was granted under the Defense Production Act, which compels companies to manufacture essential items during the coronavirus pandemic.
"Our 33rd use of the Defense Production Act will mobilize Kodak to make generic, active pharmaceutical ingredients,” Trump said during a press conference. "We will bring back our jobs and we will make America the world’s premier medical manufacturer and supplier."
According to Fox Business, Kodak shares surged more than 2,000 percent following Tuesday's announcement. A single share was selling at $2.62 when the market closed on Monday; they reached a high of $59.98 apiece on Wednesday.
The 132-year-old company filed for bankruptcy in early 2012, as cameras began merging with phones and consumers shifted from printing photos to posting them on social media. Kodak came out of bankruptcy the following year, but failed to recapture its glory days as a pioneer in camera technology.
"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 to CNBC. "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."
Fujifilm Holdings Corp., which was once considered a top camera-maker, also received a $265 million federal loan for COVID-19 vaccine development. Trump announced the move Monday while speaking at the Bioprocess Innovation Center at Fujifilm Diosynth Biotechnologies in North Carolina,
"These same manufacturing processes are being conducted on an even larger scale in College Station, Texas," POTUS said. "Today, I’m proud to announce that HHS has just signed a $265 million contract with the Fujifilm Texas A&M Innovation Center, which is quite the place, to dramatically expand their vaccine manufacturing capacity."
