Putting The Equifax Hack Into Perspective: How It Ranks

Equifax Inc. EFX shares plunged more than 13 percent Friday on news of a massive security breach. The breach reportedly impacted as many as 143 million Americans. 

Deutsche Bank analyst Kevin McVeigh issued a new Equifax note on Thursday discussing just how costly much smaller prior breaches have been at other companies. Here’s a breakdown of some of the numbers:

• TJX Companies Inc TJX (2007) — 77 million records impacted, $2.22 cost per breach.
• Heartland Payment Systems (2009) — 130 million records impacted, $1.08 cost per breach.
• Sony Corp (ADR) SNE (2011) — 94 million records impacted, $1.26 cost per breach.
• Global Payments Inc GPN (2012) — 2 million records impacted, $62.67 cost per breach.
• Target Corporation TGT (2013)—40 million records impacted, $5.05 cost per breach.

“While this is a fluid situation + EXTREMELY difficult to quantify, we have put our best effort + suggest the financial impact could be in the range of $300-$400m [~5% market cap] given costs for credit monitoring, regulatory fine + penalties,” McVeigh wrote (see his track record here).

Perhaps the only silver lining for Equifax investors is that larger breaches tend to have a smaller cost per breach, he said.

As it stands, the Equifax breach is one of the five largest cybersecurity breaches in history, according to CSO. Here’s a look at the top five:

• Heartland Payment Systems (2009) — 134 million customers impacted.
• Equifax (2017) — 143 million customers impacted.
• eBay Inc EBAY (2014) — 145 million customers impacted.
• Adult Friend Finder (2016) — 412.2 million users impacted.
• Yahoo (2013) — 1.5 billion customers impacted.

For investors wondering whether or not the Equifax sell-off is a trading opportunity, TD Ameritrade chief strategist JJ Kinahan told Benzinga traders are better off not trying to pick a potential bottom in the stock.

"In these situations, the initial reaction is usually going to be a very harsh one," Kinahan said. "The conundrum is you're never sure if it's going to be a small event and they can recover (i.e., Target) or if it's going to be very prolonged. This is truly their business, so this is one that may last a bit. What I would truly tell people is if you don't have a position, you don't have to be a person that has to pick the bottom. I would let it sort itself out over the next few weeks and then get back in."

At last check, shares of Equifax were down 13.46 percent at $123.51.

Related Link: After Security Breach, Is The Long-Term Thesis Still Intact For Equifax?