Shares of Eastman Kodak (NYSE:KODK) plunged in early trading on Monday after a federal agency said it was reviewing a previously announced $765 million loan for the onetime photography pioneer to produce drug ingredients.
"Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared," the U.S. International Development Finance Corporation said in a tweet Friday.
The review of funding comes as the Securities and Exchange Commission is reportedly investigating how the company disclosed the deal with the government, according to a report from The Wall Street Journal. The probe is also reportedly reviewing stock options that were granted to executive chairman James Continenza ahead of the announcement.
The stock has been on a wild ride since the funding was announced on Tuesday, July 28. But trading activity picked up the day before the official announcement, which raised some eyebrows on the Street.
The day before the deal was announced the stock jumped 25%, and saw 1,645,719 shares exchange hands, far surpassing the average daily trading volume of 236,479 for the year prior.
As news of the deal broke Kodak, which had been trading under $2, skyrocketed. Within two days, the stock was trading at $60, with 284 million shares changing hands. In the span of just 24 hours, more than 100,000 investors added the stock to their account on Robinhood, an app popular with millennial investors.
The stock was so volatile the day after the announcement — at one point it was up more than 600% — that it was halted 20 times during the session. Shares opened Monday down $4.03, or 27%, to $10.90.
