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Cisco CEO Breaks 'Rule,' Denies FireEye Acquisition

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Cisco CEO Breaks 'Rule,' Denies FireEye Acquisition
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Rumors emerged Wednesday that Cisco Systems, Inc. (NASDAQ: CSCO) had bid $9 billion for security-maker FireEye Inc (NASDAQ: FEYE). The publication of those rumors on Seeking Alpha caused FireEye to surge more than 5 percent. On Cisco's conference call Wednesday night, outgoing CEO John Chambers told analysts that he wouldn't "bet" on FireEye being an acquisition.

On the Cisco earnings call, Chambers denied the rumor as strongly as possible: "We don't comment on acquisitions that haven't been announced, but I wouldn't count on the one that you may be hearing about today."

In Thursday's pre-market trading, FireEye was trading nearly 3 percent lower to $42.20. At Wednesday's close, the company had a market capitalization of $6.5 billion. A $9 billion bid equates to a stock price above $60.50.

On April 30, FireEye reported first quarter earnings that beat analysts' expectations on revenue and earnings, though the company still operated at a loss of $0.48 per share. Revenue growth was 69.5 percent, compared to the same quarter a year ago.

Shares of Cisco were indicated 1 percent lower following that earnings report, last trading at $29.06. This year, Cisco gained 5.5 percent to trade near a five-year high. FireEye shares gained 37.6 percent this year as of Wednesday's closing price. Shares are still well below their 2014 peak of more than $85.

Posted-In: Cisco FireEye John ChambersNews Rumors M&A Movers Best of Benzinga

 

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