Apple security breach causes investor panic, stock slide ahead of iPhone 6 launch

Apple security breach causes investor panic, stock slide ahead of iPhone 6 launch

Summary: The tech giant's stock price has plummeted over the past 24 hours, sending Apple shares to a low not experienced since January.

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Credit: Apple

Apple stock suffered a shock at market close.

Typically the iPad and iPhone maker's shares are a strong bet, but following the well-reported hack of Apple iCloud storage accounts, investors seem to have become skittish.

The Federal Bureau of Investigation (FBI) has begun investigating the security breach, which targeted a number of high-profile female celebrities including Hunger Games star Jennifer Lawrence -- and potentially upwards of 100 celebrities and their personal photos. Apple has since denied culpability after launching an immediate investigation in to the data leak, saying:

"After more than 40 hours of investigation, we have discovered that certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet.

None of the cases we have investigated has resulted from any breach in any of Apple’s systems including iCloud or Find my iPhone."

Despite at least some of the investigated cases, data breaches and stolen photos not being Apple's responsibility, the price of Apple stock still has to weather the storm. Apple stock was doing well last week -- no doubt dining out on the upcoming iPhone 6 launch -- before the security issues came to light, and hit an all-time high of $103.20. At market close on Wednesday, however, the firm's stock value dropped by 4.22 percent to $98.94.

apple shares
Source: Google Finance
apple shares
Source: Google Finance

The firm's stock has steadily climbed in tandem with an event on 9 September believed to be the unveiling of the latest iPhone, but following the iCloud investigation and a prolonged iTunes outage, many analysts on Wall Street are recommending sale of stock. In particular, Pacific Crest analyst Andy Hargreaves has recommended selling shares before the iPhone 6 unveiling.

Hargreaves believes that there will be a significant iPhone 6 upgrade cycle, with Apple potentially selling 215 million iPhones in fiscal 2015. However, the analyst also claims this profit is not enough to alter valuation metrics, and sales are likely to slow in 2016 due to fewer iPhone buyers being available -- which will also eventually cause stock to sink.

"We are maintaining our Outperform rating until we see detail on new products and services at Apple's Sept. 9 event," the analyst note states."If the announced products and services do not suggest massive incremental profit opportunities, we are likely to downgrade our rating for AAPL."

However, the analyst also suggests investors maintain some shares in the electronics giant, just in case Apple pulls something out of the hat in terms of wearable technology or payment partnerships. While the brokerage doesn't expect either industry to drive high profits, the firm is "open to being wrong."

Read on: Apple

 

Topics: Apple, Cloud, iOS, iPhone, iPad, Security

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23 comments
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  • It Doesn't Matter What Apple Says On Sept 9

    the cat is out of the bag - Apple only talks security and when they fail, they trash their users. If ever there was a time for a " mea culpa" this was it!

    Apple, the boat has sailed and you missed it!
    Mujibahr
    • Please at least read the article before trolling

      It was in no way a exploit or security flaw in the iCloud system. More than likely it was a plain old fashioned brute force password hack on the users accounts (as the article mentions). There has been no evidence whatsoever to suggests Apple security was at fault. Take your ill informed scare mongering elsewhere.
      nzjono@...
      • Apologize All You Want

        The fact remains that you're uber secure (cough cough) junk system got hacked and you threw your users under the bus!

        The fiddle is playing, your clothes are on fire, and soon your lack of gonads will be viable to all!

        You can only fool all of the people some of the time!
        Mujibahr
        • iOD 3+ vulnerabilities exposed this year alone!

          The most secure..less OS.

          -SSL goto fail
          -Find my phone
          -Celebrity iCloud hack

          How many can really trust Apple. You have to be a duh... to actually do so.

          Amazinly secureless device is the proper term!
          Uralbas
        • @Mujibahr, take a deep breath ... no, make that 10 deep breaths

          and go for a walk around the block.

          P.S. It would also help if you removed the Steve Ballmer posters from the walls in your flat ... unless you intend to become an L.A. Clippers fan. If this is the case, then move the posters to the inside of your closet doors (and keep them closed!).
          Rabid Howler Monkey
          • oops?

            Sorry your widdle pwatform is not all it's cracked up to be. Blaming others won't help.
            lamorpa
          • Weak passwords can bring down any platform

            It doesn't matter whether one is a celebrity using an iPhone with iCloud, a desktop GNU/Linux user that uses SSH to remotely connect with one's desktop/workstation or a green Linux server admin.

            "SSH Brute Force – The 10 Year Old Attack That Still Persists"
            By Daniel Cid on July 15, 2013
            http://blog.sucuri.net/2013/07/ssh-brute-force-the-10-year-old-attack-that-still-persists.html
            Rabid Howler Monkey
          • Another example: WordPress

            Looks like WordPress administrators should also avoid weak passwords.

            "New Brute Force Attacks Exploiting XMLRPC in WordPress"
            By Daniel Cid on July 24, 2014
            http://blog.sucuri.net/2014/07/new-brute-force-attacks-exploiting-xmlrpc-in-wordpress.html
            Rabid Howler Monkey
      • PS

        if Apple Security was not involved - why the patch?
        Mujibahr
      • nzjono@...: The iCloud vulnerability that Apple just patched

        allowed an attacker to mount a continuous barrage of brute force attacks on a user's account. This has been fixed.

        I believe that it would be a very good idea for Apple to send email alerts to its iCloud user's when a certain number of login attempts have been made and have failed (e.g., somewhere between 3 and 6 attempts) in a suitably short time period. This would also be a good way to get them to think about the adequacy of their password.
        Rabid Howler Monkey
        • LOL fanboy...

          It has been fixed POST FACTO. And it's evidence that Apple is totally to blame. You live in a fantasy world, but investors know what happened and they have a lot less faith in your cult now...
          siskol
      • re: It was in no way a exploit or security flaw in the iCloud system

        You are wrong.

        There was a security flaw in the iCloud system that allowed hackers to exploit for unlimited login attempts without ever locking the account. That is 100% what allowed these account hacks to occur.

        So yes, there was a security vulnerability that was in fact exploited. As other have also pointed out, what do you think Apple patched the very next day in response to these accounts being hacked? The security vulnerability.
        Emacho
      • So the users were only iCloud and no other cloud service?

        If the users were at fault, how come none of their other cloud services or bank accounts etc., were compromised? Or were they only using iCloud? Or were they stupid only about iCloud? All of them?
        annuraja01@...
  • No

    It wasn't the security breach (Apple stock was actually up on Tuesday), it was a Wall Street analyst's research note saying sell the stock. The same people running up the stock to record highs are now the ones saying sell. Typical Wall Street pump and dump.
    Rogifan
    • Security breach and Apple stock price.

      You're correct about this.... Indeed, I was waiting on something to happen or a piece of perceived bad news to hit the wires so that the sellers could make some last minute bucks before the launch on the 9th. The price will be back shortly to $103. That combined with the Samsung launch of a tweeked up Note 3 calling it a Note 4 was just enough to get people moving on the Apple stock. Those that trade could see and smell this a mile away.
      u74s1r
  • The stock was over-bought to begin w/

    Look at the chart prior to the sell-off. Just anything could send it down for a correction.
    LBiege
  • Celebrity hacks = publicity

    No surprise.
    Rabid Howler Monkey
  • It Just works!

    (the data breaching, that is)
    lamorpa
  • No

    People need to get facts straight. It WASNT a security breach on icloud. Apple already did a statement on it. Read some articles on the issue and dont be closed minded.
    NDCC1
    • Right...

      So when a hacking forum posted a vulnerability in iCloud to brute force logins. The next day 100+ high profile accounts are hacked. The day after that Apple issues a patch to fix the iCloud vulnerability.

      but Apple released a very carefully worded press release that absolves them of any blame....


      Sorry. The buck stops at Apple and everyone knows it.
      Emacho