In September last year Equifax said it had discovered that 145. Successful hackers can be paid up to $10,000 for their services (Rasalam & Elson, 2019). The massive data breach suffered by credit-rating company Equifax hit more people than previously thought, the company has reported. Uber employed a program called bug bounty, which affords the technology industry opportunities to identify and mitigate any vulnerabilities in Uber’s information system infrastructure. The Uber data breach occurred when two hackers attained login credentials to access sensitive information that was stored unencrypted on Uber’s Amazon Web Services account (Robbins & Sechooler, 2018). (2019), “A data breach is a confirmed incident of unlawful access/disclosure of sensitive, confidential or otherwise protected data, including personal health or personally identifiable information, trade secrets, or intellectual property” (p. This video explained the reasons behind the 2017 Equifax data breach incident using layman's language.
The moral of this story: Don't assume this is the end of the world if you own Equifax stock.According to Chatterjee et al. And so far this year, the stock is up a whopping 68%. Yet the conglomerate's stock actually finished 2016 up more than 20%. Not only was that an embarrassment, it cost the company billions in R&D, production, and marketing costs and wasted a real chance to cut into rival Apple's market share in smart phones. It was only about a year ago when the Korean electronics giant was forced to recall, replace, and then cancel outright its entire line of Galaxy Note 7 phones due to batteries overheating and causing fires. Since February 12, 2016, Volkswagen shares have risen more than 48%, outpacing the broad stock market, which is up a more modest 36% during that same stretch.Īnother good example is Samsung. The stock took an immediate hit, but the sell-off was short lived. The scandal forced the company's then-CEO Martin Winterkorn to resign.
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and globally were installed with software designed to trick regulators into thinking the vehicles passed emissions tests. In September 2015, for instance, the German automaker Volkswagen admitted that millions of its cars sold in the U.S. But often, those missteps - poor decisions and even scandals - are forgiven, and those stocks rebound in surprisingly short order. History is replete with examples of Wall Street punishing stocks for blunders in the short term. Of course, if you're expecting the stock market to mete out Equifax a long-term punishment for failing to safeguard the public's personal information, don't hold your breath. Hence, they expect Equifax to incur at least ten times the expenses. Equifax's breach affected roughly ten times as many people. They note that in 2015, rival credit bureau Experian experienced a smaller-scale breach that affected 15 million people and cost that company about $20 million in immediate costs.
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For instance, the credit bureau has already agreed to give every American access to its TrustedID Premier credit monitoring and identity theft protection free of charge for 12 months.Īnalysts at William Blair estimate that after insurance kicks in, Equifax's costs tied to dealing with this crisis could run between $200 million and $300 million. "The breach compromises Equifax's reputation as a trusted steward of consumer data, and will create a near-term business disruption," said SunTrust analyst Andrew Jeffrey.Īnd don't forget the actual costs related to responding to the crisis and cleaning up the mess that Equifax faces. Since Friday morning, Equifax shares are down more than 20%, as investors brace for lawsuits, lost business, and increased regulations. That's how much stock market value Equifax has lost since the credit bureau revealed last week that it was hacked, compromising the personal information of about 143 million people. While it's too soon to tell what the ultimate cost of Equifax's data breach will be, Wall Street has already rendered its initial verdict: $4 billion.
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