STOCK TALK

Stock Talk: KODAK Moment

Pitbull was spot on with the Kodak moment.

As the famous Pitbull once said, “Me not workin’g hard? Yeah right picture that with a Kodak”.

So the first thing that comes to your mind when you hear Kodak is the camera brand that produces relatively cheap camera. What’s more of a coincidence is that most Kodak products are found in drug stores. As of 7/28/20, KODAK ($KODK) was loaned a $765 million loan from the Trump Administration to help produce medicine. So what does this mean? First of all, people who were able to buy calls or shares before Wednesday literally made thousands of dollars easy. Let’s take a little look into the chart history.

Screen Shot 2020-07-30 at 2.22.57 AM
Kodak’s previous ATH

Back in 2018, Kodak’s all time high was at $11.42 per share. Soon after, with the coronavirus kicking in, the stock relatively stayed at $2 for 7 months. Just before the big news, Kodak was still trading at $2.2 average a share.

Screen Shot 2020-07-30 at 2.29.31 AM
Current 7 month chart for Kodak

Yep. Just a static line for a constant 7 months. On Tuesday, the stock ended at a price of $8.07 per share. Those that bought at around $2 had a return of 258% per share. However, things get crazy the next day. As the market opens up on Wednesday morning, Kodak shot up to $53 at one point. Trading had been halted for around 10 times within the first hour of trading. Kodak triggered over 20 circuit breakers within the first hour. People weren’t allowed to buy or sell basically for the time being.

“On Monday, 1,645,719 shares traded hands, far surpassing Friday’s 74,893 trades, and Thursday’s 80,840 trades.” (CNBC)

Take this number into consideration too. The average daily trading volume over the LAST YEAR was 236,479. This was one of the craziest surge I’ve seen for a stock in all my life. If you bought at $2, your return for EACH share would be 2300% per share. Considering if you were able to sell the shares at $53. After that, the stock corrected itself for a bit and ended the day with a price of $38.50 per share.

Final Thoughts…

Congratulations to the people who were able to catch Kodak on Tuesday. It had seemed that on Tuesday, the prices were already moving pretty well and the price just shot through the roof after the announcement. I wouldn’t chase after Kodak any time soon. We’ll see how the prices are in 4 hours when the market opens. To those that bought an insane amount of shares & calls on Monday, y’all must be able to retire now. I’d also be careful shorting Kodak as well. At this rate, stocks only go up so you’re just shooting yourself in the foot if you’re gonna short it.

 

 

 

 

Sources:

https://www.cnbc.com/2020/07/28/kodak-soars-another-40percent-after-trump-announces-deal-to-manufacture-generic-drug-ingredients.html

https://www.npr.org/sections/coronavirus-live-updates/2020/07/28/896209016/trump-gives-medical-stockpile-a-kodak-moment-with-new-loan-to-make-drugs

https://thehill.com/policy/finance/509535-kodak-shares-soar-150-percent-after-federal-government-loan-for-drug

https://www.cnn.com/2020/07/29/investing/kodak-stock-rally-defense-protection-act/index.html

https://www.cnbc.com/2020/07/29/kodak-executive-chairman-addresses-jump-in-trading-activity-before-government-deal-was-announced.html

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