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Technology Stocks : Oclaro, Inc. (Avanex-Bookham) -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Miller who wrote (19)	1/31/2000 7:27:00 PM
From: Glenn Petersen	Read Replies (1) \| Respond to of 2293

From Reuters: biz.yahoo.com Monday January 31, 5:55 pm Eastern Time Interest sparked for Avanex's IPO debut By Angela Moore NEW YORK, Jan 31 (Reuters) - Avanex Corp., a maker of fiber optic photonic processors, is set to debut on Wall Street on Tuesday, much to the delight of some well-connected investors lobbying for a piece of the initial public offering. Analysts said the IPO has attracted a great deal of attention among market players. ``It's on every IPO players most-wanted list,' said John Fitzgibbon of Redherring.com. ``Some people think it could follow the same path as Sycamore.' Shares of optical networking firm Sycamore Networks Inc. (NasdaqNM:SCMR - news), which went public in October, jumped more than 500 percent in first day trading. Freemont, Calif.-based Avanex plans to sell six million shares at a estimated price range of $13-$15 each through lead underwriter Morgan Stanley. It has applied to trade under the symbol ``AVNX' on Nasdaq. Avanex designs, makes and markets fiber optic-based products known as photonic processors, which are designed to increase the efficiency of optical networks. The company said photonic processors offer greater levels of performance and miniaturization, reduced complexity and increased cost-effectiveness compared to current alternatives. This will help support the increasing demand for bandwidth, the company explained. ``Photonic processors make fiber optic networks faster...and they increase the amount of data that can be carried on a given wave of light,' said Corey Ostman, chief technology officer at www.alert-ipo.com. ``People like this company because photonic processors operate on the light spectrum instead of converting it to electricity.' Irv DeGraw, research director for WorldFinanceNet.com also has high expectations for the offering. In his weekly report DeGraw said that given the demand for optical networks, the sector's strong valuations, strong pre-offering demand reports, and potentially solid fundamentals, he expects ``an extremely favorable initial reception.' Avanex has never been profitable. The company has funded its business through the sale of equity securities, bank borrowings and equipment lease financing, due to a lack of cash generated from its operations. This lack of cash has caused Avanex to incur large amounts of fixed expenses. The company said it expects significant and increasing manufacturing, sales and marketing, product development and administrative expenses to continue. Avanex said it will need to generate significantly higher revenues while containing costs and operating expenses if it hopes to become profitable. Avanex said it depends on a third party located in China to manufacture its subcomponents and products, so it may have difficulties obtaining a sufficient amount of high quality products, which would delay its ability to fulfill customer orders. Other investment risks include competitive factors, including introductions of products and product enhancements by potential new competitors into the photonic processor market, such as Lucent Technologies Inc. (NYSE:LU - news) and Nortel Networks Corp. (NYSE:NT - news), as well as pricing pressures. For the six months ended Dec. 31, Avanex reported net revenue of $10.9 million and net loss of about $19.8 million. After the offering, Avanex will have about 62.5 million common shares outstanding.