Security Experts:

Shares of FireEye Soar in IPO

Shares of FireEye (NASDAQ: FEYE) surged more than 100 percent on Friday, as the newly public security firm made its debut trading on the NASDAQ stock exchange.

In a much-anticipated IPO, the company is now trading under the ticker symbol "FEYE”, and offered up 15.2 million shares at $20 per share, a price above the original range of $15 to $17 per share. The stock traded as high as $44.85 before settling down to $38.74 at press time, representing a gain of more than 93 percent.

Speaking on subject of FireEye’s IPO, Qualys CEO Philippe Courtot told SecurityWeek the successful IPO should come as no surprise, as FireEye is following in the footsteps of other security firms such as Palo Alto Networks, Imperva and Qualys, which have had successful public offerings.

FireEye IPO

“The climate for security IPOs right now is very good. With the APT attacks and data breaches hitting corporations it’s not surprising that security is hot,” Courtot told SecurityWeek in an emailed statement. “Top executives are putting IT security front and center more so than ever before. However, because the security industry is so fragmented, only a few companies are in a position to grow revenue above the $100 million mark.”

FireEye has developed purpose-built, virtual machine-based security platform, the core of which its virtual execution, or MVX, engine, identifies and protects against known and unknown threats that existing signature-based technologies are unable to detect.

The security firm claims that in over 95% of its prospective customer evaluations, it found incidents of advanced threats that were conducting malicious activities and that successfully evaded the prospective customers’ existing security infrastructure, including traditional firewalls, next-generation firewalls, intrusion prevention systems, anti-virus software, email security and Web filtering appliances.

As of the end of June, FireEye claimed over 1,100 customers across more than 40 countries, including over 100 of the Fortune 500. In 2012, the company had revenue of $83.3 million, up from 2011 revenue of $33.7 million, representing year-over-year growth of 148%. The company had net losses of $16.8 million in 2011 and $35.8 million in 2012.

In 2012, revenue by region was 80% in the US, EMEA at 8%, APAC at 8%, and other regions totaled 4%.

The company previously said it plans to use the proceeds from the IPO for general corporate purposes, including adding headcount, working capital, sales and marketing activities, product development, general and administrative matters, and capital expenditures. FireEye also said it may use a portion of the IPO proceeds to acquire, or investment in, technologies, solutions or businesses that complement its business.

The company was founded in 2005 by Ashar Aziz who served Chief Executive Officer until November 2012, and was followed by David DeWalt who previously served as president and CEO at McAfee from April 2007 until February 2011, after Intel’s surprise $7.68 billion acquisition of McAfee.

Aziz currently serves as Vice Chairman of the Board, Chief Technology Officer and Chief Strategy Officer.

Former Symantec CEO, Enrique Salem, was also appointed to the FireEye board of directors in February 2013.

In early 2013, FireEye announced that it had raised $50 million in venture funding, an amount that brought the total amount raised by the company to over $100 million.

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For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.