FireEye CEO blames losses on China cybertreaty, competitors dispute drop in China's hacking activities
Publicly listed cybersecurity firm FireEye Inc. missed its projected quarterly earnings and during an earnings call Thursday chief executive Dave DeWalt attributed the disappointing results in part to the U.S.-China cybertreaty announced during Chinese President Xi Jinping's U.S. visit in September.
The comments were widely viewed with skepticism by industry professionals.
In a blog post last month, Dmitri Alperovitch, co-founder and CTO of CrowdStrike, a FireEye competitor, wrote that the company “has observed a continuation of intrusion activity from China” following the cybertreaty. “Based on our visibility into 177 countries around the world, we see no evidence of a notable decline in intrusion activity affiliated with China,” he added.
The treaty, which covers only cybertheft of intellectual property, and does not limit either nation from continuing to spy on government agencies, was viewed with a wary eye from the start.
“There's a difference between an agreement on paper and having the Chinese government, including the People's Liberation Army, actually stop conducting and supporting cyber attacks on U.S. companies," wrote Sen. Dianne Feinstein (D-Calif.), in a statement following the cyberagreement. “The Senate Intelligence Committee will be paying very close attention to how faithfully this agreement is implemented.”
On the date of the agreement, CrowdStrike CEO, President, and co-founder George Kurtz, stated that “even under the best of circumstances, industry is left to wonder how quickly China's bold intelligence gathering apparatus might be dismantled.”
Indeed, within a month, reports surfaced that China had already flouted the agreement.
FireEye shares increased by a 71 percent year-to-date gain by June, but have since retreated on those gains. Shares fell to $22.46, the lowest closing price since the Milpitas, Calif.-based cybersecurity firm's public offering in September 2013.