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FireEye (FEYE) Down 13% on State-Sponsored Cyberattack Revelation

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Shares of FireEye depreciated 13.1% on Wednesday after the company revealed that it has become a victim of a cyberattack. In a Dec 8 blog posted by the company, the company’s CEO Kevin Mandia disclosed that attackers have stolen the “Red Team” tools used by the company’s officials for testing customer security.

FireEye believes the attack has been probably carried out by hackers from a foreign adversary, terming it a “highly sophisticated cyber threat actor.” The company couldn’t identify the country it suspects. However, according to various media reports, investigators doubt Russia for the act.

FireEye also revealed that the motive behind this attack isn’t clear yet, but it seems the hackers were targeting on collecting unauthorized information about certain government-related customers. Nonetheless, management claims that the customer data is still intact.

Mandia stated, “The attackers tailored their world-class capabilities specifically to target and attack FireEye. They are highly trained in operational security and executed with discipline and focus. They operated clandestinely, using methods that counter security tools and forensic examination. They used a novel combination of techniques not witnessed by us or our partners in the past.”

FireEye noted that it is working closely with the Federal Bureau of Investigation (FBI) and some of its partners, including Microsoft Corporation (MSFT - Free Report) , and conducting an in-depth investigation on the breach. Management also said that it has developed more than 300 countermeasures to safeguard its customers and has published information that can neutralize the stolen tools.

This is not the first time when hackers have attacked a cybersecurity company. In 2011, RSA Security revealed about a data breach which hackers used to attack one of its customers — Lockheed Martin Corporation (LMT - Free Report) . Additionally, Juniper Networks (JNPR - Free Report) had disclosed about a cyber attack in 2015.

The latest data breach has put FireEye’s reputation at risk. This can impact its business in the near term as customers might be apprehensive in buying its solutions which couldn’t safeguard the company from hackers.

FireEye currently carries a Zacks rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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