Kodak Directors Get Massive Stock Grants Day Before “Blockchain” Hype Caused Shares to Spike 300%
Kodak Directors Get Massive Stock Grants Day Before “Blockchain” Hype Caused Shares to Spike 300% by Wolf Richter – Wolf Street
Regulators remain soundly asleep.
It just gets better and better. When Eastman Kodak Company [KODK] announced a “blockchain initiative,” its moribund shares jumped 300% in less than two days, from $3.10 to $12.40. They have since lost some of those gains and closed today, after a 9.5% jump, at $9.20.
But here is how seven of the directors on the board of Kodak paid themselves hefty stock grants the day before the announcement. Regulators remain soundly asleep.
The hype started with the company’s press release at noon on January 9 whose title contained the propitious and expertly chosen, algo-friendly, keyword-rich phrase “Launch Major Blockchain Initiative and Cryptocurrency….” Blockchain and cryptocurrency are the two single biggest keywords of the current Everything Bubble. Nothing even compares.
That’s all it took, and they knew it. And the rest in the press release was just decoration interwoven with blah-blah-blah.
As soon as the news was announced – “Kodak, which just launched its own KodakCoin, a cryptocurrency for photographers,…” – the stock took off.
But on January 8, seven members of the nine-member board of directors awarded themselves together, if my math is correct, 416,726 “Restricted Stock Units” (RSUs), a stock grant. At the peak price of $12.40, those RSUs were worth $5.17 million.
The company disclosed this in a slew of SEC filings on January 10, the day after the “blockchain” hype announcement. The filings also indicate that some of the RSUs have been “disposed of” already.
Note how the blockchain hype was plastered all over the media, and the stock grants have remained buried in SEC filings.
Kodak is just a shadow of its former self. It filed for Chapter 11 bankruptcy in January 2012 and emerged from it in September 2013. It has since been limping along, losing money in 2014 and 2015, making a wee-little profit in 2016, and headed for another net loss for 2017, based on the first three quarters. Revenues in Q3 dropped 8% from a year earlier to $379 million.