Facing similar headwinds as other high-flying internet momentum names of late, FireEye shares have lost a third of their value in the past month alone. After more than doubling from the start of 2014 to the beginning of March, the stock is now trading back at roughly the same level at which it began the year.
On Tuesday, Brian Kelly of Brian Kelly Capital said that he had doubled down on his FireEye bet on the same day that the company announced a secondary offering of 13.3 million shares. Kelly initially recommended the stock on March 10, when it was trading at around $80 per share, but cautioned not to go "all in" with the trade.
"I had basically thrown the towel in on this name," he said. "And then it rebounded."
Kelly said that he used Tuesday's price action as an indication that the stock may have bottomed. "When bad news comes out and there's good price action, that's the sign where you have the odds that maybe a bottom is in. I'm underwater on this trade. I doubled down on it. I will sell it at break-even."
But on Friday, Kelly said that he had exited the trade. "Forty-five was my stop. I sold out yesterday a little below $45," he said. "It was just a bad trade from the get-go."
Despite the stock's poor performance, Kelly said he was able to alleviate his losses using options. "I was able to sell some calls against it to mitigate some of the loss."
Shares of FireEye dropped more than 7 percent in Friday's session, closing at $41.18 per share.