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The 2 Biggest Stock Market Stories on Monday Morning

By Dan Caplinger - Dec 7, 2020 at 12:28PM

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Markets were mixed, but investors are watching these two companies very closely.

The stock market got out to a mixed start on Monday morning, with market participants pulling back somewhat from the surge that took all three major market benchmarks to record highs on Friday. For more than a month now, investors have largely ignored negative warning signs, with declines proving simply to be short-term pullbacks that provided only brief pauses in the bull market. As of 11 a.m. EST, the Dow Jones Industrial Average ( ^DJI 0.00% ) was down 145 points to 30,073, still clinging to the 30,000 level. The S&P 500 ( ^GSPC 0.31% ) was down 5 points to 3,965, but the Nasdaq Composite ( ^IXIC 0.00% ) pushed further into record territory with a 55-point gain to 12,518.

One of the biggest gainers in the stock market on Monday morning was Eastman Kodak ( KODK 1.04% ), as the Rochester-based company famous for its photographic products got some long-awaited good news about a new opportunity. Meanwhile, privately held Airbnb came a little closer to following through on its long-delayed initial public offering, and everything's pointing to strong demand for the travel company's shares once they're available to investors.

Person with hands behind head looking at quad-monitor display, with city skyline out windows

Image source: Getty Images.

Kodak's loan is one step closer to a done deal

Eastman Kodak shares were up 60% Monday morning, reaching levels not seen since last summer. An opportunity that had initially excited shareholders but that seemed to be gone for good now could be back on the table.

Kodak had faded to near irrelevance by Wall Street standards until last August. At that time, the U.S. International Development Finance Corporation (IDFC) announced that Kodak would be eligible to receive a $765 million loan in order to build out manufacturing capabilities for domestic production of essential materials for the pharmaceutical industry.

The stock soared in response, but questions quickly arose regarding the propriety of the deal. The IDFC put the loan on hold pending review. Now, months later, the results of that review are in, and the government agency's inspector general has found no evidence of internal wrongdoing.

With that, investors are hopeful that the loan can move forward and Kodak can start the process of transforming its business to meet its obligations. Just how much of an impact that'll have on Kodak's fundamental business performance remains to be seen, but things are a lot clearer for Kodak now than they were with the loan in jeopardy.

Airbnb hikes its IPO price

Airbnb isn't yet public. But those who are in the market for Airbnb stock in its pending IPO got news that they'll have to pay up for the privilege of participating.

Airbnb amended its IPO registration statement to boost the offering price of its shares. The company had set a previous range of $44 to $50 per share, but the new filing kicked that range much higher, to between $56 and $60 per share.

People have been excited about Airbnb for a long time, but the COVID-19 pandemic prompted the company to put off its initial public offering from earlier this year. That might have been a genius move, because it showed that the online vacation-home and room-sharing service could respond quickly as vacationers sought the safety of detached single-family residential vacation homes over cramped hotel rooms as the coronavirus spread.

Even at a higher price, Airbnb will see a lot of demand from IPO investors, and shareholders are hopeful that the stock will jump out of the gate as well. That's not surprising for a company as well known as Airbnb, and it'll be interesting to see whether $56 to $60 per share turns out to be a huge bargain for IPO stock buyers .

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Stocks Mentioned

Eastman Kodak Stock Quote
Eastman Kodak
KODK
$5.82 (1.04%) $0.06
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$35,719.43 (0.00%) $0.00
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,701.21 (0.31%) $14.46
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$15,686.92 (0.00%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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