By successfully democratizing stock trade for the masses, Robinhood infuses the financial arena with a new level of zeal and flexibility. Kodak shares are the latest example of this phenomenon.
Robinhood users hurled to buy them upon hearing Kodak was a recent beneficiary of a $765 million government loan. As a result, the number of Robinhood holders of Kodak shares jumped almost eightfold in a couple of days.
Why Did Kodak Get a Huge Government Loan?
For the longest time, Kodak, founded in 1888 in New York, enjoyed the global status as the premier purveyor of all things related to print, cinematography, and photography. However, during the critical transition from analog to digital technology, Kodak made critical missteps that cost it dearly. Despite making the first digital camera back in 1975, Kodak completely misconstrued its role in the emerging digital market.
Following the failure to properly take advantage of the new digital era, Kodak suffered a period of shrinkage and refocus on its core service as a sophisticated technologist of advanced materials and chemicals. Which brings us to the current date. America’s development bank, the U.S. International Development Finance Corporation (DFC) decided to grant Kodak a loan of $765 million to transition into advanced pharmaceutics.
This decision is first among many under President Trump’s line of executive orders to revitalize America’s fragmented supply chain for vital ingredients following the coronavirus pandemic. Kodak’s Ceo, Jim Continenza, emphasized Kodak’s new mission at the loan signing ceremony, on July 28, 2020.
“By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”
In short, Kodak will employ its considerable scientific and manufacturing expertise to produce key drug components that have come under severe shortage due to coronavirus pandemic and worsening relations with China.
Robinhood Users Jump on the Opportunity
When you have no barrier to entry to stock trading, it is easy to seize such an obvious opportunity. Kodak may have botched its transition into the digital era, but its revamping as a pharmaceutical company by the US government itself is a no-brainer in the world of trading stocks.
Upon hearing about the deal with DFC, this Tuesday and Wednesday saw Kodak shares go through the roof, by 2,189%. Before the announcement of the government loan of $765 million, Kodak was fairly popular with Robinhood users, with 9,300 holding Kodak shares.
However, this pales in comparison after the frenzy to buy as many Kodak shares as possible. Now, over 72,000 Robinhood users hold Kodak shares, a nearly eightfold increase in just two days.
With Robinhood’s trading platform, users constitute the primary driver for its stock price spike. On Wednesday, Kodak stock achieved its highest point at $46.03, rising from the meager $2.62 price prior to the July 28 announcement. At the time of writing this article, the price stabilized at $29.83.
Although we can’t track this enormous spike to Davey Day Trader, we have previously addressed the new phenomena of “Portnoy Top”. It seems such fantastic surges in stocks are here to stay as Robinhood continues to expand its eager user base.
It is one thing to seize such rare stock buying opportunities, but another thing to find about them in the first place. Care to tell us how you set up your own info channels? Let us know in the comments below.