Why FireEye Stock Just Popped 8%
Despite an analyst downgrade, shares of FireEye (NASDAQ: FEYE) were surging strongly in afternoon trading on the Nasdaq Friday. As of 2 p.m. EST, the stock was up 7.6% -- mainly on news released Thursday that a Blackstone (NYSE: BX) fund had made a $400 million strategic investment in the cybersecurity company.
At 4:01 p.m. EST Thursday, just after the close of trading, FireEye announced that Blackstone Tactical Opportunities is partnering with cybersecurity-focused investment firm ClearSky to buy $400 million worth of 4.5% Series A Convertible FireEye preferred stock. Those shares will be convertible into FireEye common stock at a conversion price of $18 per share (about 17% higher than the stock trades today).
This provision suggests that Blackstone anticipates strong growth in the share price in the near future. (If it's wrong, though, it will at least receive 4.5% interest on its investment, which is a whole lot more than it would get from sticking the money in a savings account).
Source Fool.com
