Okta’s Stock Price Drops After New System Breach That Wiped Out $2B Market Valuation

Okta Inc. suffered a new data breach last week and as a result, its stock price fell on Monday, Oct. 23. Now, with the incident, business analysts are pondering the possible negative effects on the company's stock and its sales pipeline.

As per Investor's Business Daily, Okta admitted on Friday that its files were breached by a hacking group that it has yet to identify. The compromised data were said to belong to "certain Okta customers" who uploaded files to its support system.

How the Hacking Happened and Analysts' Views

The IT service management company that provides cloud software that helps clients manage and secure user authentication into applications said the online thieves were able to break into Okta's system through stolen credentials. But despite the breach, the California-headquartered firm assured that its services are still fully operational.

Then again, after the hacking incident, some analysts are very concerned now because Okta did not even know about the breach until it was notified. As there are a lot of worries due to hacking and the fact that this is not the first time this happened, its stock price reportedly dipped by 8.1% to close at 69.42. Last Friday, the price dropped 11.5%.

"We now have concerns this could have a negative impact on the quarter and the pipeline," Andrew Nowinski, an analyst at Wells Fargo, commented. "We are most concerned with the fact that Okta was unaware of the breach and did not have the internal capabilities to detect this behavior. They were notified of the potential breach by a customer, Beyond Trust, and still took approximately two weeks to make a public disclosure."

Cyber Attack Resulted in Over $2 Billion Loss in Market Cap

CNBC reported that Okta lost more than $2 billion from its market valuation since the disclosure of the cyber attack. Aside from the technical aspect of the incident, the firm did not provide other details

Finally, the hacking is the latest incident that has been linked to Okta or its tech products. In March, it was targeted by a hacking group and a good number of Okta systems were allegedly breached.

Photo by: Okta Press Room