Cyber security company FireEye (NASDAQ:FEYE) plunges more than 25% as earnings was missed this Thursday. Although FireEye did not lose as much as anticipated, its third quarter profits was below street level approximations, while the direction for next year has decreased as well. Dave DeWalt, Chairman and Chief Executive of FireEye, said the reason behind this drop was because of the deficiency of Chinese hackers and that the Beijing and Washington agreement was ultimately damaging sales, as for the deals via online between mainland China and other countries.
“I believe this change in customer buying patterns is at least particularly due in changes in the threat landscape in the wake of the global cyber security agreements we’ve seen with China that is making headlines since September,” said Dave DeWalt during the earnings call.
Specialists thought otherwise and believed that wasn’t the reason. Piper Jaffray analyst Andrew Nowinski said “We believe the miss was attributable to factors specific to FireEye, rather than a broader slowdown.” He later added that investors should continue to exercise caution with regard to FireEye until execution improves.
According to Reuters, Wall Street analysts’ experts and business observers said that they were doubtful of FireEye’s claim that the Beijing and Washington agreement to take down cybercrimes had generally decreased sales at a time when businesses are placing extraordinary consideration on exertions to upgrade their security. FireEye quarterly results shows that their shares fell $7.16, to $21.96 during the morning. This hefty drop caused the company to lose over a billion dollars in market capitalization. This marks a record crunch for the company that had went public for $20 a share in September 2013. FBR Capital Markets analyst Daniel Ives said other companies such as Imperva Inc. (NYSE:IMPV), Proofpoint Inc. (NASDAQ:PFPT) and Palo Alto Networks Inc. (NYSE:PANW) all have posted solid results, highlighting the power in cyber security spending.