PreMarket Prep Stock Of The Day: Eastman Kodak
Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.
On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.
There have been several unexpected moves in old and new issues in 2020. One old but "rebranded" issue that has had some crazy moves is Eastman Kodak (NYSE:KODK) and it's the PreMarket Prep Stock Of The Day.
2020 Version Of The Company: Eastman Kodak operates via several business segments: Print Systems, Enterprise Inkjet Systems, Kodak Software, Brand, Film and Imaging, Advanced Materials and 3D Printing Technology and Eastman Business Park.
The print systems segment which derives the majority of revenue offers digital and traditional products and services to various businesses, such as commercial print and book publishing, and this segment contributes over half of total revenue.
Unexpected Rally: From July 27 to July 29, the issue rallied from $2.62 to $60 before retreating to end the session at $33.20. The initial session had a jump in volume from 75,000 to 1.65 million but ramped up to 284.6 million and 276 million on the latter two days.
Interestingly, there was no news on the first day of the rally but before the open on the second day, it was announced the company had landed a $765 million loan under the Defense Protection Act to manufacture drugs to treat a variety of conditions.
After the close on July 28, President Trump stoked the rising inferno when he labeled the deal as “historic” to produce critical pharmaceuticals. That created a buying frenzy in the issue in after-hours trading that day that didn't end until the issue reached $60 early in the session on July 29.
Coming Back Down To Earth: After a volatile session on July 30, from $27.50 to $44.44, it shed $3 falling from $33.20 to $29.83. Profit-takers came in earnest on July 31, losing just under $8 and swooning to $21.85.
The hammer came down on the issue on Aug. 7, when Sen. Elizabeth Warren asked the SEC for an insider trading probe of the trading activity in the issue ahead of the government contract announcement.
That dose of bad news had investors heading to exit as it fell from $21.85 to $14.40. The selling pressure didn't subside until it bottomed in early September at $5.51. After making that low, it traded with the upper boundary being $12.51, with a majority of the price action being between $7-$9 range.
Resolution To The Insider Trading Accusation: Before today's open, it was announced there was no wrongdoing involved in the process of the company receiving a $765 million federal loan for its pharmaceuticals foray, the U.S. International Development Finance Corp. has reportedly concluded.
PreMarket Price Action: At the 4 a.m. ET commencement of premarket trading, the issue spiked from Friday’s close ($7.53) to $14.88. When the issue was being discussed on the show, it was trading at the $13 area. Co-host Dennis Dick said he was "too spooked to short it in this market environment, but if I was long it, I would 110% ring the register."
Price Action During The Regular Session: After a higher open ($12.57 vs. Friday’s close of $7.53) it made an attempt to reach the premarket high but came up shy only reaching $14.18 and reversed course. As of 1 p.m, it easily breached its opening price, falling to $11.12 and is struggling to remain in the $12 handle.
The full discussion on the issue from today’s show can be found here:
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