The Grifters, chapter 1 - Kodak

[Quemado]

https://www.epsilontheory.com/the-grifters-chapter-1-kodak/

On Tuesday afternoon (July 28, 2020), the White House announced that Kodak – a public company with less than $100 million in market cap, basically a pension fund with a famous brand name attached – would receive $765 million in “loans” from the US government to create a “pharmaceutical start-up” that over a period of 8 YEARS will start making pharmaceutical “supplies”. Whatever the hell that means.

This $765 million in non-recourse, non-secured loans for pharmaceutical supply production, given to this micro-cap company with zero experience or expertise in pharmaceutical supply production, comes from the International Development Finance Corporation (DFC), a $60 billion piggy bank established by the Trump administration in 2019 to replace the Overseas Private Investment Corporation (OPIC).

Yes, “international development” and “overseas investment”.

On the corporate-grift side, it’s Kodak Chairman and CEO Jim Continenza (SEC CIK 0001197594), who picked up about 3 million shares and cheap options over the past year. It’s Kodak board member George Karfunkel (SEC CIK 0001085765), of the private equity and banking Zyskind-Karfunkel family, with his 6.4 million shares. It’s Kodak board member Philippe Katz (SEC CIK 0001579836), who owns about 4.3 million shares through at least five shell companies.

Oh, wait, you thought Jim had a background in manufacturing or pharmaceuticals? Hahahahahahaha. Hooo, boy, that’s rich. No, no … Jim is a marketing guy. Shocking, I know.

Based on yesterday’s closing price of $33.20 for the stock, I figure Jim and George and Philippe have made about $400 million over the past 48 hours.

The numbers looked even better when Kodak hit $53 earlier earlier in the day, but easy come, easy go.

On the government-grift side, it’s Donald Trump, who gets a press conference and a talking point.

It’s Commerce Secretary Wilbur Ross and Secretary of State Mike Pompeo, who sit on the DFC board of directors and approved this deal, each pocketing a favor.

It’s Larry Kudlow, University of Rochester alum and friend of Kodak, who pockets a BIG favor.

It’s Adam Boehler, 41 year-old CEO of the DFC, who cements a lucrative career once his government “service” is complete.

Crony capitalism. In its purest form.

[gibraltar72]

1. This is a Developing story.

[JHB]

2. Hmmm, where's the dividing line...

... between people old enough to "get" the joke and those who don't?

[maxrandb]

3. When do we find out how much they donated to Donnie Dipshit?

[Hoyt]

4. I think Kodak was probably as good a choice as anyone for this. I'd suggest Kodak sell some

treasury stock, and pay back the loan.

In any event, the Market seems to think the new contract will produce needed products and, of course, profits -- which will ensure the loan is repaid -- and I suspect that means new jobs, etc., and new focus for Kodak. And, it does seem prudent to have these chemicals produced in USA.

For what it's worth -- Kodak stock is down about $10 from the article's date (it was down $13 earlier today). So all those guys "lost" $100 Million in the past few days, assuming they really "made" $400 Million before.