Eastman Kodak Company KODK 25.82% shares skyrocketed 222% on Tuesday after the company announced it’s pivoting to drug ingredient development and announced a large government loan.
Benzinga’s PreMarket Prep co-host Dennis Dick said on Tuesday morning’s show that he noticed some suspicious trading activity in both the Kodak stock and options market on Monday ahead of the news.
“All I want to know is who got the memo yesterday? Look at the pop on this thing yesterday ahead of the news. That’s a big candle. That’s the biggest up move it’s had in two months,” Dick said.
What Happened? Kodak shares were up 25% on Monday ahead of the big news. Kodak’s legacy business was producing cameras, but it has since pivoted to blockchain and now is planning to produce generic drug ingredients, the company said.
“I’d be looking at who was buying that thing yesterday. If there was some insider buying happening, that’s interesting knowing it’s this type of headline, which is basically just trying to drive the price up in my opinion,” Dick said.
“Would I be chasing this? Absolutely not. I think when the dust settles, this thing will be back down.”
How To Play It: Dick said Kodak’s share price reacted similarly back in 2017 when the company attempted to get in on the blockchain trend on Wall Street. Despite huge short-term spikes on the blockchain news, Kodak shares were still down about 80% overall in the past three years ahead of this week’s explosive gains.
“I wouldn’t be chasing it up around $8 because I don’t know when the hot potato ride ends, but I think you’ve got to be careful shorting it as well because these things can go crazy. This is a squeeze now,” Dick said.
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