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Kodak’s getting a loan to get into drugs, but not the fun kind.
The former photo giant earned itself a $765M loan from the US government to help develop drugs needed to help with coronavirus treatment.
The move is the first of its kind under the US Defense Production Act, which allows the President to call for businesses to prioritize contracts to create materials necessary for national defense.
The goal? Cut US reliance on India and China for the production of medications, especially those needed to deal with COVID. So does this mean the US gonorrhea epidemic will go untreated?
Kodak’s had its fair share of trouble over the last few years. The disposable camera market just isn’t what it used to be. How bad did it get? The one-hour photo pioneer even went as far as to dip its toes into the always reliable cryptocurrency mining market. Considering it’s now manufacturing medical-grade drugs, it’s safe to say that didn’t pan out as expected.
It’s not the only one getting into the drug game, either. Archrival Fujifilm has also received some US dinero to work on a COVID vaccine. How much? Oh, just $265M.
The difference between the deals is that Fujifilm’s work is a federal contract, while Kodak has to pay back its loan over the next 25 years. Better start rehiring some of those salespeople you laid off in 2007.
The bottom line…
After news of the deal broke, Kodak’s stock price went off, rising more than 203% in premarket trading. Previously, it had fallen 43.7% YTD through Monday. All in all, not a bad day for the company that invented the digital camera in 1975, did nothing with it, and went bankrupt in 2012.
Water Cooler Talking Point(s)
💧 “If only Kodak had waited to release the digital camera for the onslaught of high school parties from 2001 on… hindsight really is 2020, huh?” (AJ, The Water Coolest HQ)
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