Imperva Inc (NYSE:IMPV) Gets A Huge Investment from Elliott Associates

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Imperva Inc (NYSE:IMPV) shares were up 12.41% to $45.46 after the market close and an additional 0.09% in after-hours trading on Tuesday after SEC filings revealed that hedge fund Elliott Associates made a major investment in the cybersecurity company. Imperva has a market cap of $1.47 billion at 32.26 million shares outstanding.

Imperva is a company that provides cybersecurity solutions that protect business-critical data and applications whether in the cloud or on premises. It operates in the segment of development, marketing, sales, service and support of cyber-security solutions that protect business critical data and applications, with its products including the Imperva SecureSphere platform for enterprise data centers, and Imperva Incapsula and Imperva Skyfence offerings for cloud-based security services.

Details of the SEC 13D filing on the company showed that Elliott Associates has a 9.8% stake in the company comprised of 6.8% of the shares of common stock outstanding and 2.9% of the shares of common stock oustanding pursuant to the Derivative Agreements. As it turns out, activist billionaire investor Paul Singer made a huge investment in the company. The filing also indicated that investors believed that the securities of the issuer are materially undervalued, which basically translates to potential upside for share prices.

Be mindful, however, of so-called “hysteria buying” after this report is published and make sure to check the company’s fundamentals first as well. Elliott Associates noted that it has started talks with the management on strategic and operational opportunities but didn’t share further details.

Imperva has reported a 30% increase in sales for the year and analysts polled by Reuters project a slowdown in quarter-over-quarter growth for the next three periods from 10.5% to 20%. Web application firewall (WAF) comprises 40% of the company’s sales while database sales comprise 45%, with the remaining 5% accounting for the growing cloud security services aspect. As it is, Imperva is still facing stiff competition from the likes of IBM and F5 Networks, with other industry players such as Symantec and Blue Coat joining forces to get a larger share of the market.

 

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