Kodak Stock Hits Over 2-Year Highs On Pension Asset Sale And Termination Plans: Retail Applauds

Shares of Eastman Kodak Co. ($KODK), a former giant in the photography industry, jumped by more than 22% to over two-year highs in Monday morning trading after the company announced a major asset sale to the Mastercard Foundation, the charitable arm of Mastercard Inc. ($MA).

Kodak is selling illiquid assets from its Kodak Retirement Income Plan (KRIP) for $550.6 million in cash. The deal is expected to close by the end of the year. 

In addition to the Mastercard Foundation agreement, Kodak plans to sell an additional $87.3 million worth of assets to four other investors for $61.7 million, with some of the proceeds expected in 2025.

Eastman Kodak Inc. stock movement over the past three years as of Nov. 25 | Source: TradingView

Following the development, Kodak's shares jumped to highs last seen in August 2022.

Kodak’s board of directors is also considering fully terminating KRIP, a pension plan established for its employees. 

If this happens, Kodak estimates there could be between $885 million and $975 million left over in surplus assets after paying off all liabilities. 

“At this time, the Board has not yet made a formal determination to terminate KRIP,” the company said in its SEC filing. 

KRIP also holds hedge fund assets worth $917.2 million as of Sept. 30. Most of these are already being redeemed, and the proceeds will go toward paying off the plan’s liabilities.

If the board ultimately moves forward with terminating KRIP, the company will sell off its remaining hedge fund and illiquid assets to fully meet any outstanding obligations.

Eastman Kodak Inc. Sentiment and Message Volume on Nov 25 as of 12:10 p.m. ET | Source: Stocktwits

Retail sentiment on Stocktwits has ballooned to ‘extremely bullish’ (92/100) from ‘bearish’ a day ago as chatter also surged to ‘extremely high’.

Users on the platform are anticipating that Kodak could replicate the gains it achieved during President-elect Donald Trump’s first term as he prepares to return to the White House.

Kodak shares experienced a staggering rally in 2020 after the company received a $765 million government loan to manufacture pharmaceutical ingredients as part of a pandemic-driven push to bolster domestic medical supply production.

Following the announcement, Kodak's stock soared 1,200%, climbing from around $2.62 to over $33 within two days.

So far in 2024, the company’s stock has gained 73% as it continues its pivot from being a photography pioneer to a pharmaceutical producer. 

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