Kodak share price plunges on Monday after a U.S. government agency announced it would halt a $765 million loan to the company for the production of pharmaceutical ingredients in the country. The U.S. International Development Finance Corporation said that recent allegations of wrongdoing raise severe concerns on the loan and it would pause the loan until the claims were cleared.
Kodak is also under investigation for inside trading after Kodak CEO, Jim Continenza, received 1.75 million stock options one day before the announcement. The news for the loan two weeks ago sent Kodak’s shares over 1,000% higher.
The loan to the company would help to be transformed into a pharmaceutical company under the Defense Production Act (DPA), that will produce generic pharmaceutical ingredients to reduce USA dependency on drug imports. President Trump plan is to try to bring back jobs to the country and make the USA a top medical manufacturer.
The $765 million loan to Kodak would be the agencies first in response to the coronavirus outbreak. The loan is still in the form of a letter of interest and will be finalized after due diligence by the agency.
Even it is tough to approach the Kodak share technically, let’s see some critical levels to watch. As of writing the stock is 30% lower at $10.65, making the lowest level since July 28.
The first support for Kodak is at 8.50 the daily low. Next support area is at 5.84 the low from July 28. On the other hand, initial resistance for the share is at 11.22 today’s top. More selling pressure awaits at 16.80 the high from August 7. The next supply zone would emerge at 21.29 the top from August 3.
All in all, Kodak share price will move on the news that will come out of the investigation and traders have to be very careful in trading Kodak share.
