Pirelli announced today that it has bought 12.4% of Avanex Corp from Alcatel-Lucent making it Avanex's new main industrial investor. The deal was reportedly worth 33.4 million euros.
In related news, Alcatel-Lucent has extended its supply agreement with Avanex for another 3 years.
According to press releases, the companies make up a trio of elation. Avanex, the producer of optical components for telecommunications, stated it was pleased to have Pirelli enter the share capital of our company and it looks forward to future collaborations with both Pirelli and Alcatel-Lucent. ALU and Pirelli reps voiced similar sentiment.
From February to late-May, AVNX plunged nearly 30% before regaining most of its losses by mid-July. Since then, shares have taken a similar 30% dive to hit a near annual low in mid-September. If the trend continues, AVNX is poised to take a bullish swing. The recent news doesn't hurt, as shares have already muscled more than 9.5% today.
After meeting support at the 13 level and resistance at 14.50 from late-April to early August, Alcatel-Lucent has taken a nosedive. After announcing more than 12,500 job cuts and its third profit warning in less than a year, the stock hit a new annual low of $8.53 on September 17. Since then, ALU has been meeting resistance at the 10.50 level. Investors seem to be holding steady until Wednesday, when the company is slated to unveil further job cuts and third-quarter earnings. Shares of ALU are currently at $9.56, up 1.59%.