The alleged class includes : All persons or entities that purchased or otherwise acquired Kodak common stock from July 27, 2020 through August 7, 2020, inclusive.
Kodak is a technology company that traditionally provides packaging, functional printing, graphic communications and professional services for businesses. In May 2020, Kodak began negotiating with the U.S. International Development Finance Corporation (“DFC”) to receive a loan under a new government program to increase supply chains in response to the COVID-19 outbreak. In June 2020, Company insiders purchased tens of thousands of the Company’s shares. Then on July 27, 2020, the Company awarded its Executive Chairman James Continenza (“Continenza”) 1.75 million stock options, and three other executives a total 135,000 stock options. The following day, Kodak and the DFC announced that Kodak would receive a $765 million loan, the first such loan made under the new government program. In response to this announcement, Kodak’s stock price shot up over 1,000% to $33.20 per share at the close of trading on July 29, 2020. Due to this massive increase, the pre-announcement stock purchases and stock options grants of insiders also skyrocketed in value. Continenza alone saw the value of his July 27 options grants increase to $50 million in just 48 hours.
The Complaint asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Kodak and certain of its executive officers. The action alleges that during the Class Period, Defendants misrepresented and failed to disclose material information pertaining to the Company’s business and operations, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants failed to disclose that the Company had granted Continenza and several other Company insiders millions of dollars’ worth of stock options, immediately prior to the Company publicly disclosing that it had received the $765 million loan, which Defendants knew would cause Kodak’s stock to immediately increase in value once the deal was announced. In addition, while in possession of this material non-public information, Continenza and other Company insiders purchased tens of thousands of the Company’s shares immediately prior to the announcement, again at prices that they knew would increase exponentially once news of the loan became public.