Sony Hack Is A Boon For Wall St. Cybersecurity Stocks
International Business Times
Published Dec 19, 2014 01:27PM ET
Sony Hack Is A Boon For Wall St. Cybersecurity Stocks
By Kathleen Caulderwood -
North Korean hackers aren’t the only people high-fiving over the infiltration of Sony’s computer networks. After a 12-month period that began with attacks on high-profile companies, including Target, Home Depot and eBay, the stocks of cybersecurity companies are soaring — especially those held in the PureFunds ISE Cyber Security ETF, a five-week old exchange-traded fund that trades under the ticker symbol HACK.
“Obviously it’s good news for these companies,” said Christian Magoon, the CEO of Magoon Capital who helped create the fledgling fund as a consultant to ETF Ventures.
Since the fund began trading on Nov. 12, its shares have jumped 7.3 percent, compared with the S&P 500’s 1.5 percent gain over the same period. Much of the gain has come in the days since Sony’s hack.
Magoon said he and the fund’s other creators were initially worried they had missed an opportunity for a splashy market introduction.
“A couple months before the fund actually launched the product, we were thinking, ‘Oh no, we missed the big Apple hack,” he said, referring to the incident in September of this year in which hackers released photos of celebrities mined from their Apple cloud accounts. But their concerns were soon calmed. The day the ETF launched was also the day Chinese hackers infiltrated the U.S. federal weather network.
HACK jumped 6.8 percent this week, thanks to strong markets. But the fund may have been helped by Sony’s decision Wednesday to cancel the release of "The Interview," the feature film that spurred the attack on the company.
Beyond the recent high-profile hacking attacks, Magoon sees plenty of long-term upside for the cybersecurity industry.
“The driver of cybersecurity is that corporations and governments and individuals are increasingly depending on digital data. As the dependence has grown, so has the temptation for cybercrime, which correlates into a strong demand,” Magoon said. “It’s sort of like insurance, nobody thinks about it until a big loss.”
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Written By: International Business Times
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