NEW YORK (TheStreet) -- Twitter (TWTR) round two? That was a question for FireEye (FEYE) investors Tuesday ahead of the expiration of sales restrictions on millions of insider shares. And on StockTwits.com a majority said "no."
About 68% of FireEye's outstanding shares will become available for trading Wednesday. Investors in the security company have long braced for a scenario in which insiders, frustrated with FireEye's near 70% decline from March all-time-highs, will shed shares.
However, on Tuesday, many investors bet that the stock would go up as new investors, encouraged by a lack of insider selling, bought in and short sellers covered rather than risk more losses. Short interest in the stock is 10.31% of float, according to shortsqueeze.com.
$FEYE Today was a test by the MM they are going to squeeeeze the life out of the short sellers tomorrow....mark my words.? brad smit (@Bsmit) May. 20 at 04:56 PM
Sentiment on FireEye remained majority bullish Tuesday with 55% of the StockTwits' crowd calling for gains, according to site analytics. Bullish sentiment actually increased nearly 6% Tuesday ahead of the lock-up expiry.
$FEYE 70% of the float will be unlocked tomorrow...Seem like lots of heroes are here holding it up. Very brave.? Lyndon Joseph (@ardeljoseph) May. 20 at 04:00 PM
One reason for the confidence in FireEye insiders holding shares was a bullish note from Nomura. Analyst Rick Sherlund said that FireEye is a best-in-breed security company that will pay off for investors with a longer time horizon who are willing to deal with the ups and downs of the stock as the company invests in its business. Sherlund maintained a buy rating on the stock and $55 target. FireEye shares rose nearly 5% today and closed up yesterday. However, they declined 0.73% in after-hours trading.
$FEYE here comes the stampede out the exit? Jason Yi (@Jason100) May. 20 at 03:40 PM
$FEYE gap fill technical setup is the perfect bull trap before lockup crashes this one 10% or more...? bnm (@bnm123z) May. 20 at 02:40 PM
And investors doubted Nomura's objectivity. Some said that the Nomura analyst might be drinking the FireEye Kool-Aid given that his firm was one of the underwriters of FireEye's IPO offering and would have had many people exposed to the marketing spiel.
$FEYE Nomura: hey guys, we're the underwriters, so we should probably make a last ditch effort to upgrade this so we get more bagholders? Brian (@ballsohardstreet) May. 20 at 05:37 PM
But others argued that the impact of the lock-up expiration was already priced into FireEye shares. The stock now has a $4 billion market cap -- a far cry from the $13 billion it once boasted.
FireEye expects to bring in between $405 million and $415 million in revenue this year with gross margins in the range of 70% to 73%, according to its latest quarterly report.
@scottsdalem understand the TWTR was at all time high as was FB when the lock-up occured. FEYE has already been sold off. Big difference? Megaas2000 (@Megaas2000) May. 20 at 05:18 PM
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.