Thursday's Market Minute: What Happened To Kodak?

TD Ameritrade Network
·1 min read

Eastman Kodak (NYSE: KODK) shares closed up over 318% on Wednesday and saw trading volume of roughly 161,000,000 compared to Tuesday’s volume of 272,359,000 and Monday’s of 1,645,700. Before this week, Friday’s daily volume was just 74,900. The company was favored short prior to the recent rally, with nearly 6% of shares trading being sold short, about five times the average short interest ratio compared to stocks in the Dow Jones Industrial Average. So what happened?

Tuesday, Kodak was granted a $765 million loan from the U.S. government to develop generic drug ingredients, sending shares soaring 203% to close out the session. The Wall Street Journal reported, “The onetime leader in photography sales is gearing up to produce ingredients for generic drugs, including the antimalarial drug hydroxychloroquine that President Trump has touted in the treatment of coronavirus.” Eastman Kodak provides hardware, software, and services in graphic arts, commercial print, publishing, electronic displays, entertainment and commercial films, as well as consumer products worldwide.

Because of this week’s rally so far, the stock is up nearly 614% YTD and 1,388% MTD. And more significantly, short-sellers have lost as much as $50 million in just a matter of this week. Kodak currently has no analysts covering its company.

See more from Benzinga

More From Benzinga

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  • Exclusive: Largest Airline Trade Association To Reduce Workforce 20%

    Reflecting the financial distress of its airline members in the midst of the coronavirus pandemic, the International Air Transport Association is planning to reduce its worldwide staff by a fifth, a source at the trade association said.IATA represents nearly 300 airlines operating scheduled and non-scheduled air service.Airlines around the world are expected to lose $84 billion in 2020 and are slashing hundreds of thousands of people from payrolls. Airlines have made radical cuts to discretionary expenses in a desperate effort to preserve cash. The savings initiatives include membership dues, forcing the largest airline trade association to reduce its workforce. "IATA has been impacted by the crisis. Early on, our senior management took voluntary pay cuts and we drastically reduced our spending. As the crisis has dragged on, we are also evaluating further steps to reduce costs, including actions impacting staffing levels, starting with voluntary redundancies," an IATA spokesperson said in a statement provided to FreightWaves.IATA employs about 1,600 people worldwide. It plans to eliminate about 20% of its jobs, or 400 people, with some sort of announcement likely at the end of August, the source said. Airlines have canceled more than 7.5 million flights so far because the coronavirus destroyed travel demand. They are still only operating at about 15% of normal flight schedules as more travel restrictions are lifted. IATA estimates airline revenues will be more than $420 billion below last year's level.About 400,000 airline workers have been fired, furloughed or told they may lose their jobs due to the coronavirus, according to a recent analysis by Bloomberg. The figure doesn't include many others who have taken voluntary unpaid leave in hopes of having a job to return to in the future.In the U.S., American Airlines, Delta Air Lines, United Airlines have notified about 75,000 employees their jobs could be eliminated when emergency federal payroll support expires at the end of September. Airlines and unions are lobbying for a six-month extension of the program, but the ongoing stalemate in Congress over a broader economic bailout makes any airline rescue unlikely now.Click here for more FreightWaves/American Shipper stories by Eric KulischRECOMMENDED READING: IATA outlook for airline industry recovery slides to 2024Cargo revenues buoy airlines amid b loss for 2020American Airlines warns of 25,000 job cutsPhoto by Ashim D’Silva on UnsplashSee more from Benzinga * How Long Will The West Coast Stay Active? – FreightWaves NOW * US Border Closures With Mexico, Canada Extended Through Sept. 21 * How Air Canada Beat US Airlines Removing Seats For Cargo(C) 2020 Benzinga does not provide investment advice. All rights reserved.

  • US Border Closures With Mexico, Canada Extended Through Sept. 21

    The closures of the U.S. land borders with Mexico and Canada for non-essential travel have been extended another month to curb the spread of COVID-19.The land borders will remain closed through September 21, Acting Homeland Security Secretary Chad Wolf announced in a tweet on Friday morning.The U.S. land borders have been closed to non-essential travel since March in response to the COVID-19 pandemic. Trucks have continued to move freight relatively freely across the Mexican and Canadian borders during the closure.Pandemic-related shutdowns of large portions of the U.S., Mexican and Canadian economies have proven to be the biggest drag on cross-border trade.U.S.-Mexico and U.S.-Canada cross-border freight volumes have pushed higher over the summer after plunging during the spring because of the pandemic.Drug seizures have also surged at both borders during the closures. Cross-Border Freight Market Reporter Noi Mahoney contributed to this report.Click for more FreightWaves articles by Nate Tabak.CBP officers make another big marijuana bust at US-Canada borderTruckers warned of fake quarantine text messages in CanadaTitanium holds steady in Q2 despite revenue dropPhoto by Jeremy Dorrough on UnsplashSee more from Benzinga * How Air Canada Beat US Airlines Removing Seats For Cargo * Unemployment Falls Under 1 Million Claims, Chassis Pool Debate, And HOS Changes * Amazon Cuts Ties With More Delivery Providers(C) 2020 Benzinga does not provide investment advice. All rights reserved.

  • How Air Canada Beat US Airlines Removing Seats For Cargo

    It took the Federal Aviation Administration two months to authorize U.S. airlines to remove seats from passenger aircraft for cargo purposes. Air Canada (TSX: AC) received its governmental OK in a week.Industry urgency to innovate also was greater north of the border. Canada's flag carrier was already flying cabin-loaded flights by mid-April, one month before U.S. carriers even applied through their trade association to remove seats from their airplanes.The delay may have cost U.S. carriers their window of opportunity to maximize returns from transforming aircraft in response to space shortages caused by the withdrawal of passenger service due to the coronavirus. American Airlines (NASDAQ: AAL), Delta Air Lines (NYSE: DAL), and United Airlines (NASDAQ: UAL) threw airplanes into cargo-only service in late March, but many international airlines went further and removed seats from some aircraft to create room in the passenger cabins for more boxes of personal protection equipment and other in-demand products. Shipping rates have since fallen significantly. They may not be high enough to justify conversion costs at this point, although Hong Kong-based Cathay Pacific recently modified its first two passenger freighters for floor-loading and rates are starting to climb again.Among the Big Three carriers, only Delta appears interested in taking advantage of the seat-removal option."Delta is evaluating the use and opportunity of removing seats in aircraft for cargo purposes.  We have submitted the required documents to the FAA for certification," spokeswoman Debbie Sheehan said."We are not currently utilizing this method and don't have plans at the moment to remove seats or modify cabin space," American Airlines spokeswoman Laura Bassel said in an email.United Airlines is similarly sticking to cabin cargo in seats and overhead bins, a spokeswoman confirmed.Fast-Track Approach Government bureaucracies aren't known for speed when it comes to regulatory decisions, but Transport Canada was lightning-fast responding to Air Canada's request to exempt some airplanes from existing operating certificates. European carriers were also able to get emergency exemptions from civil aviation authorities to carry medical coverings and other light products in the cabin.Air Canada didn't waste any time when it heard other airlines were planning to load boxes in passenger seats. An internal engineering panel met on March 23 and launched a feasibility study and risk assessment of seat removal. On April 1, airline officials gave the go-ahead to reconfigure three Boeing 777-300 aircraft. Seven days later they received regulatory approval for the conversion, and on April 14 Transport Canada certified the airplanes for commercial operation, said Johanne Cadorette, manager of global marketing and communications for Air Canada Cargo.Avianor, an aircraft maintenance and cabin integration specialist in Montreal, removed 422 passenger seats and designated cargo loading zones for lightweight boxes restrained with cargo nets. The conversions, which doubled the aircraft's volumetric capacity, took three days to complete, and the first cabin-loaded flight began operating April 18, Cadorette said.Since then, Air Canada and Avianor have modified a fourth 777 and three Airbus A333 twin-aisle aircraft. The Airbus approvals took less than a week. The decision to replace the A333 seats was made easier because they are recently purchased used aircraft that were scheduled to have their seats replaced, according to Cadorette.Air Canada has operated hundreds of flights with the seven seatless passenger freighters – or "preighters." They helped the airline increase revenue by 52% in the second quarter from the prior year. In July, it began sending converted aircraft to Atlanta; Havana; Istanbul; Bogota, Colombia; and Quito, Ecuador. "The converted aircraft are part of our strategy to continue offering capacity where passenger flights are not available. There is a lot of demand to use the cabins for mail and some perishables, in addition to continued demand for personal protective equipment," Cadorette said. Unique Safety Factors Air Canada was able to expedite approval because company officials, the engineering firm that developed the conversion specifications and Canadian aviation authorities sat in the same room and went through all safety factors together, said a well-connected industry source familiar with the process. The person asked not to be named so as not to jeopardize an ongoing role. Since there are no fire suppression systems in aircraft passenger cabins, Air Canada is using specially trained maintenance engineers to ride in the cabin as marshals. Their job is to ensure the cargo is loaded and secured safely, according to customized plans, check labels for weight and flammable material, and act as firefighters in the air if necessary, according to Air Canada.Safety issues airlines, regulators and manufacturers have to consider for in-cabin cargo include: the number and type of fire extinguishers (halon, water, or chemical); weight and balance issues; and the type of cargo restraints and how they are secured to the floor.In Cathay Pacific's case, the Hong Kong Civil Aviation Department requires the airline to place cargo in customized bags made from a fire-retardant material that helps keep it intact.Air Canada came up with a system to divide the aircraft into zones to ensure the cargo weight is distributed properly. Cargo in the cabin must be placed in 36 positions, each with unique weight, shape and height limitations, according to the company and the industry official. When boxes aren't uniform size it adds time to the process.Weight and balance are critical to flight planning and impact the route, fuel burn and takeoff and landing speeds. Technicians use special software that considers variables such as weather, wind speed and cargo weight.U.S. airlines have the additional complication of having to follow Transportation Security Administration rules for 100% screening of cargo on passenger planes even if there are no passengers on board, the source said.Click here for more FreightWaves/American Shipper stories by Eric Kulisch.RECOMMENDED READING:FAA clears airlines to remove passenger seats for cargoSwiss Air Lines cleared for more types of cabin cargoAlaska Airlines poised to use seats for cargo-only flightsPhoto by Ethan McArthur on UnsplashSee more from Benzinga * Unemployment Falls Under 1 Million Claims, Chassis Pool Debate, And HOS Changes * Amazon Cuts Ties With More Delivery Providers * TIA Q2: Broker Margins Up Over First Quarter, Down From 2019(C) 2020 Benzinga does not provide investment advice. All rights reserved.