Shares of Eastman Kodak Co. shot up almost 15 percent in unusually heaving trading Wednesday after CEO Antonio Perez told employees that recent Kodak stock purchases reflect management’s faith in the photography pioneer’s future.
Some analysts suspect, however, that the stock price surge reflects Kodak’s recent preliminary triumphs over smartphone giant Apple Inc. in their patent-litigation battle before the U.S. International Trade Commission, a federal agency that oversees trade disputes.
Regulatory filings late Tuesday revealed that Perez and Richard Braddock, the presiding director of Kodak’s board, each purchased shares valued at around $200,000. Chief Financial Officer Antoinette McCorvey bought shares worth about $36,000.
Perez told employees on an internal website that the purchases “reflect our confidence in the company’s future and our belief in the potential of the Kodak transformation” into a digital photography and printing powerhouse.
Kodak expects more losses this year before achieving annual profitability in 2012 for the first time since 2007.
Its shares jumped 48 cents, or 15.4 percent, to a seven-week high of $3.60 in afternoon trading Wednesday. More than 24 million shares were exchanged in the first three hours of trading.
“I assume that something must be happening on the intellectual-property front — I can’t explain it any other way,” said Ulysses Yannas, a broker with Buckman, Buckman & Reid in New York. “It has to be institutional investors with that kind of trading — 24 million shares are not bought by the public.”
Apple has not previously commented on the pending litigation. Calls to the Cupertino, Calif., company were not immediately returned Wednesday.
In Kodak’s latest skirmish with the iPhone maker, a judge at the Washington, D.C.-based trade commission ruled Thursday that the 131-year-old camera maker’s digital-camera technology does not infringe on Apple’s patent rights and said one of the two patents in dispute is invalid.
Judge Robert Rogers Jr.’s reasoning won’t be made public until both Kodak and Apple review his ruling and determine if it includes information that the companies feel is confidential. His decision also is subject to review by the agency’s six commissioners.
Kodak is attempting to negotiate a royalty-paying deal worth up to $1 billion in a separate claim against Apple and BlackBerry maker Research in Motion over a 2001 imaging-preview patent. The commission, based in Washington, D.C., agreed in March to rule on that claim by June 23.
Patent cases can take years to resolve, and agreements over licensing and royalty payments often emerge. But the trade commission, which can order Customs to block imports of products made with contested technology, is seen as a fast-track mediator that typically resolves disputes in 12 to 18 months.
Kodak has amassed more than 1,000 digital-imaging patents, and almost all of today’s digital cameras rely on that technology. Mining its rich array of inventions has become an indispensable tool in its long and painful digital overhaul.