What happened
Shares of Eastman Kodak (KODK -3.71%) fell 9.4% on Monday after White House trade advisor Peter Navarro didn't exactly mince words as to how he feels about the company's senior leadership.
So what
Navarro is clearly not pleased with how Kodak handled announcements and other activities related to its $765 million Defense Production Act loan award. Kodak is reportedly being investigated by the Securities and Exchange Commission (SEC) for disclosures related to the loan, as well as possible insider trading activity. The company's board of directors also made the questionable decision to grant Executive Chairman Jim Continenza a sizable amount of Kodak stock options a short time before the deal was announced.
"Based on what I'm seeing, what happened at Kodak was probably the dumbest decisions made by executives in corporate history," Navarro told CNBC. "You can't fix stupid," Navarro went on to say. "You can't even anticipate that degree of stupidity."
Eastman Kodak's stock declined following stark remarks by White House trade advisor Peter Navarro. Image source: Getty Images.
Now what
The loan was intended to help Kodak launch a new pharmaceutical supply business that would produce components deemed critical in the battle against COVID-19. The Trump administration also wanted to reduce the country's dependence on foreign manufacturers and strengthen its domestic pharmaceutical supply chain. Kodak was to play a key role in this endeavor. Now, however, those plans have been placed on indefinite hold until Kodak is cleared of any wrongdoing. And judging by Navarro's comments, it may be some time before Kodak actually receives the $765 million in funding, if at all.
