The company came public in late September at an IPO price of $20 a share, well above its prospective range of $15 to $17. It closed its first day of trading at $36, up 80%.
Of the 14 million shares sold Friday, just 5.6 million are being offered by the company. The rest are being offered by existing shareholders, and the dilutive effect of those 8.4 million shares is likely what made the offering price so low. FBR Capital raised its price target on the stock to $105 on Wednesday, citing the pending secondary offering as a positive because it removed the overhang from investors who were waiting for this particular shoe to drop. But that price rise was based on an offering of 5.6 million shares, not 14 million.
FireEye has said it plans to use its proceeds to invest in future growth and that it is not looking for short-term profit gains. The company reported a net loss of $0.35 per share in January.
FireEye’s stock began a steep climb in January and trading volume has picked up to nearly 2 million shares a day. The steep discount being offered is likely to attract more buyers, even though current shareholders will not be happy with the steep discount. Given its history, FireEye could recover the past couple of days’ losses fairly quickly.
Shares were down nearly 7% in premarket trading Friday, at $83.36 in a post-IPO range of $33.30 to $97.35.
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