Management Turnover as Change Agent

Monday, July 7, 2008

Avanex CEO Terminated Shortly Before Shareholders Meeting

Avanex Corporation AVNX (NASDAQ), a global provider of Intelligent Photonic Solutions(TM) designed to meet the needs of fiber optic communications networks announced today the termination of its president and CEO, Jo Major, PhD.  Dr. Major will also be leaving the board. In addition to Major's termination, the company's CFO, Marla Sanchez, also resigned her position. 

According to the company's press release the termination was,
... due to the inability of Dr. Major and the Board of Directors to work together effectively. 
... The departure of Dr. Major and Ms. Sanchez is not related to the Company's operational performance or financial condition. The Company is reconfirming its fiscal fourth quarter revenue guidance of between $50.0 million and $53.0 million. In addition, the Company anticipates positive cash flow for its fiscal fourth quarter.
In the interim period the company has appointed,
Dr. Giovanni Barbarossa as Interim Chief Executive Officer. Dr. Barbarossa has worked at Avanex since February 2000 and has served as Senior Vice President and Chief Technology Officer since May 2002. Previously he ran the Active Component Business Unit. Dr. Barbarossa joined Avanex prior to its initial public offering and has been a member of the executive team for over six years.
 The company has already initiated a search for permanent replacements through a board committee.  Paul Smith, a member of the board has been appointed as Noon executive Chairman of the Board.  It is difficult to determine from available information what exactly was the reason behind Dr. Major's termination.    The company has been facing serious problems.  According to RTT News,
The company last month regained Nasdaq compliance. In March, Avanex stock closed below $1 per share for 30 consecutive trading days, below the minimum required under Nasdaq rules. 

Avanex is expected to hold its annual stockholders meeting July 9, where shareholders will vote on a proposed reverse stock split. The reverse stock split will help boost the value of each share, thus making it easier for the company to stay listed on the exchange.
Keep a close eye on the company as it gets ready for its annual stockholders meeting and what actually comes out of the meeting.

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1 comment:

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