It’s enough to you a devout believer in laissez faire when President Trump’s mention of a company that’s never been involved in pharmaceuticals and the government’s willingness to lend that company money to produce generic drug components can send its stock from $2.62 to $60 in two days. Don’t read this if you have a weak stomach. From Wolf Richter at wolfstreet.com:
Insiders front-run the announcement. Locust-swarms of Robinhood traders pile on top. Taxpayers brace themselves. Shaking my head while holding my nose.
Yesterday or today was probably the first time that many Robinhood traders had contact with something antediluvian called “Kodak,” and boy did they jump into it.
People who have been around this zoo for an additional two years remember that Kodak last was infamous for a crypto-insider-stock-grant scheme when it announced on January 9, 2018, that it would create its own crypto, called KodakCoin, which at the peak of the crypto-idiocy, caused its stock to quadruple in two days, from $3.10 to $12.40, before it re-collapsed. As you’d expect from an outfit like this, on January 8, the day before the announcement, seven independent directors had awarded themselves huge stock grants.
So, on Monday, Kodak’s shares [KODK] closed at $2.62, up 25%. On Tuesday, President Trump’s announcements started. By Wednesday morning, shares hit $60 for a microsecond, a 2,190% gain in less than two days, before giving up nearly half of it and closing at $33.20. This chart shows the daily action, including the effects of the KodakCoin-scheme: