Cybersecurity breaches move markets - the Okta example
Identity-as-a-service provider Okta has revealed on Friday Oct 20th that hackers were able to access its customer support management system and get access to sensitive customer information (such as access tokens stored in uploaded files).
It's interesting to see how prompt and significant the reaction was in terms of market movement: the share price dropped -16% immediately following the announcement, indicating a major blow to profitability as cleanup costs are anticipated to mount.
Companies (especially publicly traded ones) are now scrutinized more than ever before, as breaches can impact both revenue and profitability.
SaaS and IaaS providers such as Okta have an especially strong incentive to minimize breach risks, as the consequences can impact not only the company, but all its customers and third parties, quickly propagating down the supply chain (witness Progress Software MOVEit breach here).
It will be interesting to watch the consequences of this breach as revealed in upcoming 8-K forms, which companies are now required to submit following cybersecurity events (the 8-K form is a standard Securities and Exchange Commission mechanism to announce major events that shareholders should know about).
See recent 8-K revelations here, showing how breach costs are mounting and directly impacting company sales and/or profitability.