BACKGROUND: Over 82M shares of FireEye can be sold tomorrow without the restrictions that were put in place following a secondary stock offering by the company, an April 22 regulatory filing by FireEye indicates. The first day on which shares can be sold following restrictions is referred to as the lock-up expiration day. Following the registration last month of the shares that FireEye issued in connection with its acquisition of Mandiant, about 145M shares of FireEye would be outstanding, the company estimated in the filing last month.
ANALYST OUTLOOK: After restrictions preventing FireEye insiders from selling stock expire on May 21, investors could become more optimistic about the shares, Nomura analyst Rick Sherlund predicted. FireEye has a robust opportunity in the IT security market and its technology is "best-of-breed," while its management team is strong, the analyst stated. FireEye is investing heavily and losing money, but investors with a longer term time horizon could benefit from the company's positive attributes, the analyst indicated. The stock reached an attractive entry point, wrote Sherlund, who kept a Buy rating on the shares.
PRICE ACTION: In late morning trading, FireEye jumped about $3, or 10.4%, to $31.94.
Reporting by Larry Ramer.