Yahoo and Verizon: One’s stock bounces but not the other’s

It should come as no surprise that amid a multi-billion-dollar corporate sale, news that one of the parties had just set a new world-record for number of consumer accounts hacked would knock the stock of both companies for a loop.

Especially if the hacked firm was beating its own record.

Yahoo — in the midst of a $4.8 billion sale to Verizon — announced Wednesday, Dec. 14 that it had suffered a breach of more than a billion users’ accounts in 2013. That disclosure followed revelations this fall of a half-billion-account hack that Yahoo knew about in 2014 but did not disclose for nearly two years. The Wednesday announcement sent the share prices of Yahoo and Verizon plummeting sharply.

Yahoo had already said, in a Securities and Exchange Commission filing that revealed it knew about the 2014 hack the same year, that the sale of Verizon could fall through. And after Yahoo announced the billion-account hack Wednesday, Verizon said it was reviewing the impact of that disclosure on the deal.

Yahoo’s Wednesday announcement fueled additional speculation that Verizon will run screaming from the firm it once coveted, and reports that Verizon will seek a steep discount on the sale price. Verizon has threatened to go to court if the deal is not re-priced, Reuters reported Dec. 16.

Yahoo’s price tumbled from $41.46 around the time news of the hack hit Wednesday afternoon, to close at $40.91 and plunge further overnight to $38.47 Thursday morning, a 7-percent drop. Verizon stock slid from $52.13 Wednesday afternoon to close at $51.63 and fall overnight to $51.36 Thursday morning, a drop of 1.5 percent.

But Verizon quickly bounced back from its afternoon bout of Yahoo-itis — its stock price rose fairly steadily from Thursday morning, to close slightly higher, at $52.27 Friday, than the point at which it had started to fall on Wednesday.

Yahoo’s stock did not see a similar bounce. But Wednesday’s fall was not followed by any major price slippage. Though it edged downward Thursday to close at $38.41, Yahoo’s share price picked up a bit on Friday Dec. 16, to close at $38.61.

Yahoo’s stock price has plunged 12 percent to Dec. 16 since the day in September when it revealed the half-billion-account hack. Verizon’s has risen a fifth of a percent.

Photo: Yahoo CEO Marissa Mayer delivers the keynote address Thursday, Feb. 18, 2016, at the Yahoo Mobile Developer Conference in San Francisco. (Eric Risberg/AP)

 

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  • Jeff Safire

    Yahoo’s $0.55 drop on Friday does not quite define a “plunge.”

 
 
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