Online Cheating Site AshleyMadison Hacked (update)

SOURCE: https://cnb.cx/1HSvCuY

Iashey2nfidelity website AshleyMadison.com, which has been struggling to launch a London IPO, can kiss goodbye plans for a listing this year, banking sources said on Tuesday, as hackers threatened to publish names and salacious details about its clients unless the website shuts itself down.

The website’s Canadian parent hoped to raise up to $200 million by listing its shares in London this year, five years after a lack of investor appetite caused it to cancel an attempt to list at home.

Hackers threatened to leak nude photos, sexual fantasies, real names and credit card information for as many as 37 million customers worldwide of Ashley Madison, which uses the slogan: “Life is short. Have an affair.”

The data breach, bad for any company that has a repository of confidential customer data, could be disastrous for one whose business model is based on complete confidentially.

With more than 37 million members worldwide, Ashley Madison claims to be the world’s second-largest dating website. Only Match.com, owned by media mogul Barry Diller‘s IAC/InterActive, is bigger.

ashley_madison_73134Avid Life Media, the parent company of Ashley Madison and websites such as Cougarlife.com and EstablishedMen.com, values itself at $1 billion. It reported revenue of $115 million in 2014, up 45 percent from the preceding year.

“Of course they’re going to have to put any IPO plans on ice. It will be at least a few months before any banks would consider touching it,” said a second Canadian investment banker.

“I don’t think this kills the company, unless all the data eventually gets leaked.”

Avid Life said it had since secured the site and was working with law enforcement agencies to trace those behind the attack. It also said it is convinced the hackers were formerly connected to the company.

Crisis communications experts said Avid Life had made a smart move in quickly saying it may know who was behind the hack, removing some uncertainty from the situation for its clients.

Still, Wells Fargo analyst Gray Powell said in a note Tuesday that the hack will create remediation costs and may expose Avid Life to potential legal issues.

“While this is clearly a unique case, the Ashley Madison breach demonstrates that security is about more than just budget dollars and that lost customer data can dramatically impact business plans, brand perception and even company valuations,” he said.

Author: Amanda Walker

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