What's Going On With Roku Shares After Reporting Data Leak Involving 576,000 Accounts?

Roku, Inc. ROKU shares are trading lower on Friday.

The company’s shares plummet after identifying a data incident impacting around 576,000 additional accounts. 

Earlier this year, Roku said its security monitoring systems detected an increase in unusual account activity. 

“After a thorough investigation, we determined that unauthorized actors had accessed about 15,000 Roku user accounts using login credentials (i.e. usernames and passwords) stolen from another source unrelated to Roku through a method known as “credential stuffing,” the company said in a statement. 

Additionally, Wells Fargo maintained its Underweight rating on the stock and lowered its price target from $51 to $45.

Credential stuffing is a type of automated cyberattack where fraudsters use stolen usernames and passwords from one platform and attempt to log in to accounts on other platforms. 

This method exploits the practice of individuals reusing the same login credentials across multiple services, Roku said.

After concluding the investigation of this first incident, the company notified affected customers in early March. It continued to monitor account activity closely to protect our customers and their personal information. 

Through this monitoring, Roku identified a second incident, which impacted approximately 576,000 additional accounts.  

In less than 400 cases, malicious actors logged in and made unauthorized purchases of streaming service subscriptions and Roku hardware products using the payment method stored in these accounts.

“While the overall number of affected accounts represents a small fraction of Roku’s more than 80M active accounts, we are implementing a number of controls and countermeasures to detect and deter future credential stuffing incidents,” Roku said.

Price Action:  ROKU shares are trading lower by 2.28% to $60.54 on the last check Friday. 

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