# Will you invest in a company that has been hacked earlier?



## LiolaJames (Apr 30, 2015)

I would like to start up this discussion here. I recently read a study that was undertaken by KPMG revealing that 80% of the investors don't invest in companies that has been hacked. I think businesses try to hide such cyber crimes from reaching the public. But today when there are a lot of cyber crimes would a regular investor mind in not investing in a hacked business? What do you think?


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## Beaver101 (Nov 14, 2011)

^ I would be wary about continuing to be customer or being a customer of the company that has been hacked, let alone being an investor. The question I would ask is how serious is management being about the hack and its cyber-security? Perception do count also.


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## brad (May 22, 2009)

Just as the safest time to fly was after 911 and the best time to buy a Toyota was after the recall fiasco, a company that has been hacked once will probably make an extra special effort to ensure that it is never hacked again. 

We just did some music recording at a studio -- the engineer told us he has five hard disks and a triple-layer automatic backup system, because he never used to back up diligently and one day he lost everything, including recordings of CDs he was still mixing. Would you avoid someone just because he didn't used to back up but learned his lesson and now has multiple layers of redundancy?


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## Toronto.gal (Jan 8, 2010)

Beaver101 said:


> ^ I would be wary about continuing to be customer or being a customer of the company that has been hacked, let alone being an investor. The question I would ask is how serious is management being about the hack and its cyber-security? Perception do count also.


What companies are immune to such attacks do you think?


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## Beaver101 (Nov 14, 2011)

^ mcd, thi, pot, fts, fc, etc. 

But don't let me stop you from investing in those *[email protected]* companies though. :biggrin:


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## Cal (Jun 17, 2009)

It wouldn't bother me unless I thought they were in some way susceptible to a fundamental business altering hack....most companies have a way to get by.


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## Beaver101 (Nov 14, 2011)

^ Would identity theft be considered a fundamental business altering hack by your definition?


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## Just a Guy (Mar 27, 2012)

Are you asking about the companies who've admitted to being hacked and are doing something about it, or the companies trying to hide the fact that they've been hacked and are trying to ignore reality?


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## Cal (Jun 17, 2009)

Beaver101 said:


> ^ Would identity theft be considered a fundamental business altering hack by your definition?


No, to me identity theft is like stealing.


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## nobleea (Oct 11, 2013)

Cal said:


> It wouldn't bother me unless I thought they were in some way susceptible to a fundamental business altering hack....most companies have a way to get by.


This. Would I invest in Home Depot or Target because they had massive data breaches? Sure. Would I invest in Square or Visa if they had massive data breaches on their side? Probably not, though a good time to invest would be right after the breach.


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## kcowan (Jul 1, 2010)

I was in Home Depot during their hack and agreed to the Equifax ID theft reporting. Partly because I changed my CC immediately, I avoided damage, just inconvenience.


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## Rusty O'Toole (Feb 1, 2012)

If you were like Warren Buffett, world's most successful investor, you would invest in a company because it was hacked.

He did this in 1959. American Express was involved in a sensational scandal in which a con man cheated them out of $5 million using phony salad oil receipts. The stock plunged.

Buffett did some research. He found out yes, they had been cheated and yes, it was going to cost them millions. But the loss was not enough to damage the company seriously, although it would affect that year's bottom line.

He sat beside the cash register at a local restaurant to count the American Express cards used, and quizzed restaurants and credit card users, as to whether the scandal would cause them to stop using their credit cards. Most never heard the story, and none cut up their cards because of it. Businesses did not notice any drop off in credit card business.

So, he bought a bunch of stock when it was stinko and selling at a big discount. A year or 2 later the scandal blew over, the stock went back up, and he made a big gain.

I believe he still owns the stock he bought back in 59. It is worth quite a bit more now than when he bought it.


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## Beaver101 (Nov 14, 2011)

kcowan said:


> I was in Home Depot during their hack and agreed to the Equifax ID theft reporting. Partly because I changed my CC immediately, I avoided damage, just inconvenience.


 ... was too a customer (not an investor though and remain at such) of theirs before the hack and could have written off hack that as an inconvenience (never took their Equifax ID monitoring freebie(?))... however, after reading that they knew of their systems breach some months (7 or 8?) before but didn't do anything about it - I have stopped shopping there altogether. Adios.


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## amazingAkj (May 19, 2015)

What is the point of investing in such hacked companies when there's no return in future?
And also even if there's a return and everything is been solved, would there be audiences for such companies?
If no, then never ever invest in such 
And if yes there is enough audience then make up your mind for a boom already!


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## Sandra (May 14, 2015)

I won't invest in hacked companies because I want to sleep well at night and live normally, and don't be stressed every time when you think about your invested money


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## MrMatt (Dec 21, 2011)

Sandra said:


> I won't invest in hacked companies because I want to sleep well at night and live normally, and don't be stressed every time when you think about your invested money


Since almost every major company has been the victim of a hack or fraud of some sort at some time, who do you invest in?

Quite simply if the biggest, most advanced and most capable tech companies can fall victim to the occasional hack attempt, the rest of them don't stand a chance.
The software they use has flaws, they have to trust people, and mistakes happen.

The real issue is how effective their risk management strategy is, and how well they contain these breaches.

Most banks have been targetted, most have lost some money, that doesn't make them bad investments.


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## Rusty O'Toole (Feb 1, 2012)

amazingAkj said:


> What is the point of investing in such hacked companies when there's no return in future?
> And also even if there's a return and everything is been solved, would there be audiences for such companies?
> If no, then never ever invest in such
> And if yes there is enough audience then make up your mind for a boom already!


The point of investing in them is, that there IS a return in the future.

Do you want to know how to make money? Buy low, sell high. One good way to do this is buy GOOD companies when the stock is stinko because of some problem.

You don't just buy any random stock because they are having trouble.

Think of it this way. A champion athlete could be injured and unable to play temporarily but bounce back once he recovers. On the other hand if an 85 year old gets sick chances are he will never recover completely.

The trick is to analyze the company and its affairs, and figure out if it is a good stock temporarily selling cheap, or one that is on the skids for good.


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## MrMatt (Dec 21, 2011)

Rusty O'Toole said:


> The point of investing in them is, that there IS a return in the future.
> 
> Do you want to know how to make money? Buy low, sell high. One good way to do this is buy GOOD companies when the stock is stinko because of some problem.
> 
> The trick is to analyze the company and its affairs, and figure out if it is a good stock temporarily selling cheap, or one that is on the skids for good.


Hacking victims are great people, because it is so likely that irrational investors will overreact.
Even here, where you'd hope people are more informed, some would actually suggest that being a victim of a hack is enough to disqualify investing in a company.


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## Beaver101 (Nov 14, 2011)

Because some people here are more informed, they would prefer to stay away from such hacked companies, investing and shopping-wise - better safe than sorry and besides plenty of choices (companies) to invest and shop. However, it does not prevent those who remain informed to start or continue to invest and shop at those known hacked companies, nothing wrong in doing this either. :biggrin:


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## fraser (May 15, 2010)

I worked in the IT area for many years. Companies do not publicize this information. Only a tiny proportion of those organizations that get hacked make it to the news.

Chances are very good that if you hold a diverse portfolio you have invested in a company that has been hacked. Just how it is today.


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## Beaver101 (Nov 14, 2011)

fraser said:


> I worked in the IT area for many years. Companies do not publicize this information. * Only a tiny proportion of those organizations that get hacked make it to the news.*
> 
> *Chances are very good that if you hold a diverse portfolio you have invested in a company that has been hacked. Just how it is today*.


 ... of course, even government organizations get hacked, like contagion. But it doesn't mean we just throw our hands up and say "here's more money/business to/for you".


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## MrMatt (Dec 21, 2011)

Beaver101 said:


> ... of course, even government organizations get hacked, like contagion. But it doesn't mean we just throw our hands up and say "here's more money/business to/for you".


Beaver, your opinion confuses me.
You think that organizations that are honest and ethical by disclosing breaches are somehow riskier or less deserving of companies than companies that hide the exact same data?

I'd hope that more informed investors understand that disclosed security breaches aren't necessarily a result of anything being done wrong. A culture of disclosure is something that actually improves security. Many computer companies have resisted patching security holes until they are well known.
Secrecy wrt security is the PROBLEM, not the actual security failures.


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## Beaver101 (Nov 14, 2011)

MrMatt said:


> Beaver, your opinion confuses me.


 ... that's okay as said before, don't let me prevent you from investing and shopping at these hacked companies, disclosed or not.


> You think that organizations that are honest and ethical by disclosing breaches are somehow riskier or less deserving of companies than companies that hide the exact same data?


 .. I didn't say that, you're saying it ... as I mentioned above, hacking is like a contagion and no company or even governments are immune to it.



> I'd hope that more informed investors understand that disclosed security breaches aren't necessarily a result of anything being done wrong. A culture of disclosure is something that actually improves security. Many computer companies have resisted patching security holes until they are well known.
> Secrecy wrt security is the PROBLEM, not the actual security failures.


 ... that's what I was referencing in my very first post #2 -


> ... The question I would ask is how serious is management being about the hack and its cyber-security? Perception do count also.


 and see comment in my subsequent post #13 about the fix occurring some 7 or 8 months later. And in the meantime, hundreds, if not thousands of shoppers' cc/IDs were being compromised. So should the company be rewarded with more business when they do fix the patch eventually? It's really up to the consumer to decide, you and me.


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## ohsmarketing (Mar 24, 2015)

It is really hard to invest on those company which is hacked earlier.But that company makes you famous worldwide .I completely think different from others.If we have faced something bad in our past so it doesn't mean we should shop trying.Research properly what are the lacking and weak point and work upon that and then give a proper make over and invest on those company.Just live in the present .Forget about past and future.


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## LBCfan (Jan 13, 2011)

Depends a lot on what was 'grabbed' by the hackers. Home Depot lost a lot of credit card numbers. That could be a bit a a liability. POT lost some internal documents. Is there a difference?


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## realestateongabriola (Mar 24, 2015)

No one wants to invest in the company like that but business is like a gambling if you want success you have to do thing which is of higher risk might that gives you the success story of the life.


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## fraser (May 15, 2010)

Exactly how could you confirm that a company you wanted to invest in, say ABC Inc. had been hacked...or had not been hacked?

Unless it involved credit cards and the news you would never know. So what about all those companies who do not deal with the public. Alcan for instance. Do you know for sure if they have or have not been hacked? And why would they even make it public if they had?

They would not.


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## MrMatt (Dec 21, 2011)

ohsmarketing said:


> It is really hard to invest on those company which is hacked earlier.


Since almost every major company HAS been the victim of hacking or fraud at some level, there really aren't any unhacked companies left.

Can you identify which company is left that you are investing in? Are you sure they haven't been "hacked"?


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## bobsander (Aug 4, 2015)

no, i would not! It is just too risky!


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