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What happened
Actions of Eastman Kodak (NYSE: KODK) fell 9.4% on Monday after White House trade adviser Peter Navarro didn’t really mince words on what he thought of the company’s senior management.
So what
Navarro is clearly not happy with the way Kodak has handled announcements and other activities related to the granting of a $ 765 million loan under the Defense Production Act. Kodak is reportedly under investigation by the Securities and Exchange Commission (SEC) for disclosures related to the loan, as well as possible insider trading activity. The company’s board of directors also made the questionable decision to grant executive chairman Jim Continenza a significant number of options on Kodak shares shortly before the deal was announced.
“From what I see, what happened at Kodak was probably the dumbest executive decisions made in company history,” Navarro told CNBC. “You can’t fix stupid ones,” Navarro continued. “You can’t even anticipate this degree of stupidity.”
Eastman Kodak shares declined following harsh remarks from White House Trade Advisor Peter Navarro. Image source: Getty Images.
Now what
The loan was intended to help Kodak launch a new pharmaceutical supply company that would produce components deemed essential in the battle against COVID-19. The Trump administration also wanted to reduce the country’s dependence on foreign manufacturers and strengthen its domestic pharmaceutical supply chain. Kodak was to play a key role in this endeavor. Now, however, those plans have been put on hold indefinitely until Kodak is cleared of any wrongdoing. And judging by Navarro’s comments, it may be some time before Kodak actually receives the $ 765 million in funding, if at all.
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