MGM Resorts faces significant losses following September cyberattack

This post was originally published on this site

Hornbuckle made these remarks on Tuesday at the Global Gaming Expo at The Venetian, where he detailed the extent of the socially engineered attack. Despite early detection and immediate measures to protect data by shutting down systems, the hackers managed to disable all remaining systems. The breach resulted in the theft of personal customer data, but no financial information was compromised. MGM has assured affected customers that they will receive free identity protection and credit monitoring services.

According to InvestingPro’s real-time metrics, MGM Resorts International has a market capitalization of $13.08 billion, and its stock has been volatile, with a 15% drop in the last month. In addition, MGM’s P/E ratio stands at 38.41, indicating that it’s trading at a high earnings multiple, a point also highlighted in InvestingPro Tips.

The incident is expected to cost over $100 million and will negatively affect MGM’s Q3 results due to additional legal and consulting expenses. This could lead to a drop in net income this year, as suggested by InvestingPro Tips. Unlike Caesars (NASDAQ:CZR) Entertainment, which paid a $15 million ransom following a similar cyberattack in September, MGM has refused to pay any ransom demands.

Both MGM Resorts and Caesars Entertainment are now facing federal lawsuits over their respective incidents. The MGM breach bears similarities to Norsk Hydro (OTC:NHYDY)’s 2019 ransomware attack, potentially becoming the costliest on record according to cybersecurity expert Brett Callow from Emsisoft.

Despite these setbacks, Hornbuckle remains optimistic about upcoming events such as the Formula One Las Vegas Grand Prix. The incident serves as a stark reminder of the increasing threat of cyberattacks to corporations across various sectors, including outside the casino industry. Clorox (NYSE:CLX) recently reported a cyberattack causing operational disruptions and product shortages, leading to a projected 23-28% sales drop for Q1 2024.

InvestingPro Tips also note that MGM’s management has been aggressively buying back shares and that its strong earnings should allow for continued dividend payments. For additional insights like these, readers can refer to InvestingPro, which provides detailed metrics and tips for companies like MGM.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.