Ireland's Data Protection Commissioner (DPC) is reportedly conducting an accelerated examination of the massive 2014 hacking incident at Yahoo! Inc. (YHOO - Free Report) that caused theft of user information from 500 million accounts.
Yahoo publicly admitted the incident in Sep 2016 and has faced U.S. politicians’ ire for being so late in admitting the breach.
The Data Protection Commissioner also stated that it awaits information from Yahoo on allegations that it assisted U.S. authorities to scan some email accounts. The examination is aimed at ascertaining if Yahoo’s support to the email surveillance was in violation of European law.
Reuters had reported last month that Yahoo developed a custom software program to scan all of its users’ incoming emails for particular information demanded by the FBI. The news had fueled widespread privacy concern.
The spokeswoman of DPC, MB Donnelly confirmed the change from preliminary enquiry to active investigation in case of the hacking incident. As far as the email surveillance incident is concerned, she stated that DPC is continuing with preliminary assessment of the case.
YAHOO! INC Price
Will the Verizon Deal be Affected?
It would be interesting to see how all these affect Verizon’s (VZ - Free Report) decision to acquire Yahoo’s core assets for $4.8 billion.
Earlier, Verizon's general counsel Craig Silliman confirmed in a statement that the company has received preliminary briefings but it’s expecting a demonstration of the full impact on Yahoo’s part. Till that time, Verizon will keep its final decision on hold.
He stated Verizon is "absolutely evaluating (the breach) and will make determinations about whether and how to move forward with the deal based on our evaluation of the materiality." Silliman, however, declined to comment on renegotiation of the purchase price.
At its third quarter 2016 earnings conference call, Verizon Executive Vice President and Chief Financial Officer Francis J. Shammo stated that the evaluation is still on and more information has been sought from Yahoo.
We believe that Verizon, on being aware of the fact that Yahoo is troubled to a great extent, will find it extremely difficult to look for another buyer, and is most likely to try and extract a better price.
Zacks Rank & Other Key Picks
Currently, Yahoo has a Zacks Rank #2 (Buy). Other stocks worth considering in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) and Kimball Electronics, Inc. each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, the consensus estimate for NVIDIA has increased 33.3% in the past 30 days. Estimates for Kimball Electronics have gone up by 8.1% over the same time frame.
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