Yahoo’s newest data breach could have important consequences in terms of its sales deal with Verizon as the company could choose to walk away.
The fact that Yahoo has been having problems is not new. Earlier this year, the company admitted to a massive data breach. Having taken place in 2014, it involved about 500 million accounts.
Earlier this week, Yahoo went to announce a new, even more widespread problem. On Wednesday, the company informed users of its newest data breach.
Having been believed to have taken place in 2013, it involves more than a billion user accounts. Reports of the first breach were slow to be confirmed.
The company, which was in the midst of a sales talk, took its time in admitting the problem. An official release in regards to the 2014 breach was only released in September.
As some say that Yahoo knew about the problem since August, other stated to have been even sooner. However, the company’s slow admission is easy to determine. At the time, the Internet company was in talks with Verizon.
The sales deal saw Verizon acquiring Yahoo for $4.8 billion. March 2017 was the expected closing date of the sale. However, following the newest data breach, the sale was once again put to the question.
Following the announcement of the 2014 breach, Verizon was reported to take measures. One action was a renegotiation of the contract. Verizon was reported to have asked for a $1 billion sale reduction.
Another move was the request for a company status report. This sought to analyze the effects the breach announcement may have had on the company.
Verizon also announced its intention to reevaluate the sales deal. Following the latest breach announcement, it has issued a similar statement.
The company announced late Wednesday night that it will be reanalyzing the contract. When asked for a follow-up, the company refused a new statement.
Bob Varettoni, the Verizon spokesman, declared on Thursday that the company will not be commenting on the matter. As such, their Wednesday press releases will be the only such statement.
Yahoo representatives reportedly declared that they are confident in the company’s value. They are also reportedly continuing in their Verizon integration efforts.
The company stated that the newest data breach announcement did not hurt its services’ traffic. Further consequences of the latest issue have yet to be announced.
But market analysts have started raising questions in regards to the sale. Verizon is reportedly reviewing the breach impact on the sales deal.
Some suggest that it will either ask for a steep price reduction. Other suggest that it may downright withdraw from the deal.
Market shares were, however, quick to respond to the announcement. Yahoo market sales closed at $40.91 on Wednesday night. Starting from $41.46, they continued to plunge. By Thursday morning, they had reached a $38.47 value.
However, the day’s 7 percent drop was not followed by a steeper decline. After continuing to slowly decline, Yahoo shares rose slightly. On Friday, the market close saw them at a $38.61 value.
Verizon shares were both better and worse for wear. Following the newest Yahoo breach, Verizon shares fell to a $51.63 value on Wednesday night.
They continued to fall overnight, from an initial $52.13 to a $51.36 Thursday morning value. However, company shares started rising. On Friday, they even slightly higher than their Wednesday value, at $52.27.
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