(Reuters) - Shares of Eastman Kodak Co (N:KODK) jumped more than 20% in premarket trading on Thursday after ballooning nearly 16 times in value this week, following a $765 million loan from the U.S. government to produce pharmaceutical ingredients.
The U.S. International Development Finance Corp said on Tuesday it would sign a letter of interest to provide the loan to Kodak, once an industry leader in cameras and the imaging business. (https://
Kodak shares rose four-fold on Wednesday, with retail traders on the popular Robinhood trading app piling into the stock.
Its shares have gone from trading at $2 to more than $30 apiece in three days and short selling specialists S3 Partners said that sellers were still scurrying to cover their short positions. The financial analytics firm said 9.48% of the stock was currently being "shorted", where investors bet that the shares will fall.
The participation of retail investors has spiked since COVID-19 lockdowns were introduced and they are credited with sparking rallies of between 300% and 500% in stocks of bankrupt or soon-to-be-bankrupt companies such as Hertz (N:HTZ), Chesapeake (N:CHK), Whiting (N:WLL) and JC Penney (OTC:JCPNQ).
The loan to Kodak comes at a time when the Trump administration has been looking to bolster the ability to produce drugs and their raw materials in the United States after the COVID-19 pandemic exposed the industry's dependence on China and India for its supply chain.