KODK - Why You Should Avoid Buying Eastman Kodak Stock Right Now
In 1988, camera giant Eastman Kodak (NYSE: KODK) made its debut in the pharmaceutical sector by acquiring Sterling Drug for $5.1 billion. The company argued that the chemicals used in its photography busines could have potential uses as active pharmaceutical ingredients (API). The venture was moderately successful, and by 1994, Kodak had sold the entirety of its Sterling Drug segment piece by piece for a combined total of $6.5 billion, netting a $1.4 billion profit.
Twenty-six years later, Kodak is back at it again with the announcement of a $765 million government loan for the company to make generic APIs to treat COVID-19 patients. However, this time, the deal has been plagued by allegations of misconduct, leading the Trump administration to halt the loan payment until further notice. If investors are buying shares of Kodak thinking the deal will continue, they may be out of luck. Here's why.
Image source: Getty Images.