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Eastman Kodak (EK) surged 35% today, building on yesterday’s gains. Investors were reacting positively to two pieces of news released by the company. On Tuesday morning the company announced it was restructuring from three reporting segments to two.

Under the new structure, Kodak has reduced its number of segments from three to two – the Commercial Segment and the Consumer Segment – which will both report into a newly created Chief Operating Office. The Chief Operating Office will be led by Philip Faraci, who will continue to serve as Kodak’s President and Chief Operating Officer and by Laura Quatela, who was recently named, alongside Faraci, as President and Chief Operating Officer of Kodak. Faraci will focus on the Commercial Segment and the company’s sales and regional operations, and Quatela will focus on the Consumer Segment and certain corporate functions. Both individuals will report to Antonio M. Perez, Chairman and Chief Executive Officer, as will the positions of Chief Financial Officer, Chief Technical Officer, Chief Marketing Officer and General Counsel.

“As we complete Kodak’s transformation to a digital company, our future markets will be very different from our past, and we need to organize ourselves in keeping with that evolution,” Perez said. “This new structure simplifies the organization, focuses it more precisely on our consumer and commercial customers, and puts the right people in place to capitalize fully on the tremendous technological capabilities of Kodak. These business structure changes also allow us to allocate resources more productively, continue to significantly reduce administrative costs, and improve efficiency. We are confident that these changes will support our efforts to make the most of our opportunities.”

This led to a significant jump in the stock price, but it is unclear why. The company has rearranged furniture, but ultimately not addressed the key problem which is that the company needs cash now. While this change may lead to cost savings and/or increased profitability, it certainly won’t do so in time to help the company with its current dire situation.

After the bell on Tuesday, the company released a second announcement. In it, the company announced that it had filed patent infringement lawsuits against Apple (AAPL) and HTC. The claims were similar to previous claims the company has made regarding infringement by phone and tablet devices of a series of ridiculously broad patents. Interestingly, Kodak did not file any claims against Google (GOOG) or Motorola (MMI). Kodak has been in discussions with all of these firms for sometime and been attempting to sell its patent portfolio. This is a desperate, last-ditch attempt to force a settlement or purchase, but it is unlikely to result in any cash quickly enough to avoid bankruptcy. Despite this, shares were up 35% on Wednesday.

Mr. Market is in a manic mood and his bid this company up significantly in the last two days, but the common stock is still worth what it was before Tuesday’s open- nothing.

Disclosure: The author holds no position in any stock mentioned

Source: Don't Be Fooled By Eastman Kodak's Dead Cat Bounce