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You could say Kodak is having a moment.
The legacy camera firm announced a $765 million loan from the U.S. Government on Tuesday to produce pharmaceutical ingredients—part of an effort to reduce American drugmakers’ reliance on foreign sources and ease strains on the supply chain amid the coronavirus pandemic.
In the wake of Kodak’s unexpected pivot, investors have flocked to its stock en masse, making it by far the most traded company on the New York Stock Exchange on Wednesday and sending its price soaring. Kodak’s stock gained more than 300% today—closing at north of $33 per share after hitting an intraday high of $60 at one point—and has jumped nearly 1,500% this week so far (from $2.13 per share at Monday’s open). Since closing at less than $115 million on Monday, Kodak’s market capitalization has swelled to nearly $1.5 billion.
The production of pharmaceutical ingredients will eventually comprise up to 40% of Kodak’s business, CEO Jim Continenza told the Wall Street Journal—a development that has sent the company’s stock to levels not seen since early 2014. The company’s former business model has long fallen victim to technological winds and the rise of the camera phone, which led to it shuttering its camera business and filing for bankruptcy in 2012.
For some observers, the massive spike in Kodak’s trading volumes brings to mind the dynamics that recently impacted Hertz’s stock. Retail investors on popular stock trading apps like Robinhood flocked to the bankrupt rental car firm’s shares earlier this year, after its Chapter 11 filing sent its stock plummeting. The subsequent interest in Hertz drove its share price to unforeseen highs, despite the fact that the firm’s bankruptcy rendered those shares effectively worthless.
While Kodak’s financial situation is nowhere near as precarious, it appears a similar dynamic is at play on the retail trading apps. Tens of thousands of investors on Robinhood have bought Kodak shares this week, hoping to ride the stock’s run-up in the wake of Tuesday’s announcement.
Update, July 29, 2020: This story has been updated to include Kodak’s stock price at the close of trading Wednesday.