Have switched from short to long becasue:
a) There was only 15M shares in the IPO and,
b) not all are able to sell (postponed selling due to secondary), AND
c) Almost 3M shares traded today
d) Not all of those eligible to sell will sell today/this week. Many will continue to hold
THEN, one can assume much of the IPO Lockup selling has already hit the tape.
In most IPO lockup expiration trades, there is much selling in anticipation of the Lockup expiration and postponed buying.
That will reverse today or tomorrow, so expect upside from here.
IPO Profile. IPO Date. 09/19/13. Offer Price. $20.00. Offer Shares. 15.2 mm. Lead Manager(s). Morgan Stanley Goldman Sachs J.P. Morgan. All Underwriters.
From the 10K Page 36 -
Sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
The market price of shares of our common stock could decline as a result of substantial sales of our common stock, particularly sales by our secondary offering, our directors, executive officers, employees and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares. As of December 31, 2013 , we had outstanding 137,757,512 shares of our common stock.
As a result of lock-up agreements entered into by certain stockholders in connection with our initial public offering and planned secondary offering and certain transfer restrictions under our insider trading policy, shares of our common stock will be available for sale in the public market at various times as follows, subject to the provisions of Rules 144 and 701 under the Securities Act:
14,664,639 shares will be eligible for sale in the public market on March 19, 2014 upon the expiration of lock-up agreements entered into in connection with our initial public offering;
95,610,568 shares will be eligible for sale in the public market upon the expiration of the lock-up agreements entered into in connection with our planned secondary offering, assuming the prior effectiveness of the resale registration statement for former stockholders of Mandiant; and
1,927 shares will be eligible for sale in the public market on June 30, 2014.
Thanks for posting this. Am I reading it right that 95 M shares are still out there and may come on the market at any time? That's 70% of the # in the IPO, and at least 3X the # in this lockup plus the secondary. Sheesh. Am I right about this?
Went back to the WSJ article about Mandiant purchase. FEYE stock was 45 before purchase was announced. Article says 21M shares of FEYE were issued for this purchase. That's about 90% of the shares in the lockup + secondary. These shares must have been issues around 45 or so, not much higher. That means a huge hangover of stock from Mandiant out there at a big profit, even at 71.
From the 10K page 37 -Please read the 10K yourself to confirm my posts
The remaining restricted securities will continue to be held in escrow subject to the terms and conditions of the merger agreement governing our acquisition of Mandiant.
In addition, holders of up to approximately 84,310,480 shares of our common stock (excluding shares expected to be sold by certain selling stockholders in connection with our planned secondary offering), or 58.5% of our total outstanding common stock, based on shares outstanding as of December 31, 2013 , will be entitled to rights with respect to registration of these shares under the Securities Act pursuant to an investors’ rights agreement. If these holders of our common stock, by exercising their registration rights, sell a large number of shares, they could adversely affect the market price for our common stock. If we file a registration statement for the purpose of selling additional shares of common stock to raise capital and are required to include shares held by these holders pursuant to the exercise of their registration rights, our ability to raise capital may be impaired. Furthermore, all of our executive officers and certain of our directors have adopted, and other directors may in the future adopt, written plans, known as “Rule 10b5-1 Plans,” under which they have contracted, or may in the future contract, with a broker to sell shares of our common stock on a periodic basis to diversify their assets and investments. Sales of substantial amounts of our common stock in the public market following the release of the lock-ups or otherwise, including, but not limited to, sales made by our executive officers and directors pursuant to Rule 10b5-1 Plans, or the perception that these sales could occur, could cause the market price of our common stock to decline.
The issuance of additional stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholde
After a drop of nearly 25%, and over 20 points, FEYE has to base for some time before it can go up again. The institutional holders selling are pros, they aren't going to just dump all their shares today. They are going to spin them out over the next several weeks in an attempt to drop the price as little as possible while selling.
No one knows how much stock will be offered, or where the price will go next. Expect selling to continue for several weeks. Wait for a proper base and breakout before buying.
FEYE has support between 70 and 75, but no one knows if that will hold. Buying now is extremely high risk.
Again, you completely missed the point mentioned above regarding volume analysis:
a) Many of the potential lockup sellers will have sold (4M shares traded today against 15M total in the IPO, of which not all WILL sell and not all CAN sell).
b) The company and the underwriters will defend their secondary at $82. Expect either an upgrade by analysts tomorrow or positive company press releases in the next day or two.