Shares of FireEye Inc. (FEYE) maintained the surge over the past week with a gain of 7.87 percent as its shares ended the week at $15.39 on Friday.
In the preceding week, on November 20, shares of cybersecurity solutions provider rose 6.4% to $15.15 on the day after announcement of major investments in the business of the company.
The company announced that a strategic investment of $400 million was made by the Blackstone Foundation. 4.5 percent of class A stock will be repurchased as part of the transaction, which will be converted to FEYE common shares for $18. Therefore, purchasing at a price higher than the exchange price means that in the immediate future, Blackstone expects the share price to increase.
FireEye immediately made use of the investment and unveiled its plan to acquire cybersecurity incident analysis automation company Respond Software, in a cash and stock transaction of worth $186 million.
FireEye thus shared two good news in a one go, and that brought the price of its stock higher. In addition, many investors are now holding on to the stock anticipating more expansion.
Investment Bank Barclays, however, reduced its recommendation from “Equal Weight” to “Underweight” for FireEye shares on the morning of Friday, November 20. The analysts firm noted that as competition in the cybersecurity industry intensifies, the company would need further acquisitions. Barclays set a target price for FEYE at $17 against this backdrop, which however, also suggests an improvement from the current price level.
However, analysts have acknowledged the strengthening of the competitive position of FireEye due to the new idea of a modular integrated endpoint protection platform. The benefits of this strategy are the ability to use such modules to perform different activities exclusively in a particular industry, such as defense or finance.
After closing the week with an uptrend, the market capitalization of FireEye Inc. (FEYE) stands at $3.47 billion.