Yahoo shares fall on worries new breach will kill Verizon deal
Yahoo Inc. shares fell almost 5 per cent on Thursday after the technology company disclosed a second massive data breach that raised fears Verizon might kill a deal to buy its core Internet business.
Silicon Valley-based Yahoo said late on Wednesday that it had uncovered a 2013 cyber attack that compromised data of more than 1 billion user accounts, the largest breach in history.
That followed Yahoo's disclosure in September of a separate breach that affected over 500 million accounts, which the company said it believed was launched by different hackers.
Yahoo shares were down 4.8 per cent at $38.93 in midday trade as the latest revelation cast new doubt on whether Verizon Communications Inc. would proceed with a $4.83 billion agreement to buy Yahoo's core Internet business, struck in July.
Verizon is now seeking to persuade Yahoo to amend the terms of the acquisition agreement to reflect the economic impact of the data breaches, according to people familiar with the matter.
The telecommunications giant has threatened to go to court to get out of the deal, citing a material adverse effect if the deal does not reprice, said the sources, who asked not to be identified because the negotiations are confidential.
Verizon had already said in October it was reviewing the deal after September's breach disclosure. Late on Wednesday, it publicly said it would "review the impact of this new development before reaching any final conclusions" about whether to proceed.
The company declined to comment beyond that statement on Thursday.
Verizon shares rose 0.6 per cent to $51.95, in line with the performance of the S&P 500 Index.
The latest breach attack has drawn widespread criticism of Yahoo from security experts, several of whom have advised consumers to close their Yahoo accounts.
"Yahoo has fallen down on security in so many ways I have to recommend that if you have an active Yahoo e-mail account, either direct with Yahoo of via a partner like AT&T, get rid of it," Stu Sjouwerman, chief executive of cyber security firm KnowBe4 Inc., said in a broadly distributed e-mail.