Yahoo (YHOO) Stock Takes A Hit Following Newly Discovered Hack

The latest incident is separate from a 500-million-account breach the struggling company disclosed in September of this year.

Yahoo YHOO Stock

Yahoo! Inc. (NASDAQ:YHOO) stock is seeing a big downward move in Thursday’s pre-market hours, as the company’s shares are plunging by nearly 3%. The Web portal disclosed late Wednesday that after examining some computer files provided by law enforcement authorities, it found a breach of more than one billion user accounts that occurred sometime back in 2013.

Yahoo! said it believes the data, which involved sensitive user information, including names, phone numbers, dates of birth, encrypted passwords and unencrypted security questions, was stolen by an “unauthorized third party,” but added it can’t identify what intrusion led to the largest hack of all time. Beyond these general details, not a lot more is known in terms of whether the hacker in this instance was state-sponsored or simply economically motivated.

“Yahoo has now won the gold medal and the silver medal for the worst hacks in history,” Hemu Nigam, CEO of online security consultancy SSP Blue was quoted as saying by CNNtech.

The embattled Sunnyvale, Calif.-based technology company said it believes this latest cyberattack, which did not affect passwords in clear text, payment card data, or bank account information, is “distinct” from another online attack the firm reported in September this year.

That incident involved around half a billion accounts and was said to have been carried out by a “state-sponsored actor” in late 2014.

Yahoo also said that it is notifying potentially affected users to change their passwords and that it is invalidating unencrypted security questions. The problem though is that the hack happened more than three years ago, meaning whoever got hold of the information had plenty of time to exploit it, security experts say.

It goes without saying that there are going to be serious implications stemming from Yahoo’s latest massive customer-data breach. In July, Verizon Communications (NYSE:VZ) agreed to pay $4.83 billion for Yahoo’s core business. Thus, this second hacking incident raises even more questions over whether Verizon will follow through on its proposed takeover or renegotiate the terms of it. The Wall Street Journal reported late Wednesday that the wireless carrier “will review this new development” and its impact on users and “has all options on the table.”

It should be noted that Yahoo’s new revelation comes at a time when cybercrime issues loom larger than ever.

Yahoo shares are up 23% year-to-date and are currently trading around $40.

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