The Trend

How Ransomware Creates Opportunity

We weren’t prepared.

And it’s very likely, we’re won’t be ready for the next one.

In early May 2017, it only took hours before 200,000 companies, hospitals, government agencies, and organization in more than 150 countries found their computer files held for ransom.

Britain’s national health services were forced to close hospital wards and emergency rooms, even turn away patients in need, as a result. Russia’s Interior Ministry was hit. 

FedEx Corporation was hit, as well.

While crippling, it also exposed multiple opportunities for smart traders.  As the crisis unfolded, major cyber security stocks, like Palo Alto (PANW) and Fire Eye (FEYE) exploded.

Sometimes, it doesn’t even matter if the company has weak fundamentals, or poor technical setups.  Sometimes, when crises hit, the best way to make money is by buying a basket of related stocks.  For example, in the day following the ransomware attack, here’s how some of the biggest cyber companies fared.

  • Palo Alto (PANW) jumped $5 a share
  • Fire Eye Inc. (FEYE) was up $1.05
  • Splunk Inc. (SPLK) soared $1.40
  • Check Point Software (CHKP) was up $2.35

In fact, look at PANW in May 2017. That chart was ugly, real ugly.  But once the crisis hit, it became one of the biggest opportunities.

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By buying a basket of stocks exposed to the attack, crisis became opportunity.

Referred to as Ransomware, the virus enters companies and organizations the second any one clicks on specific attachments, spreading the virus like wildfire internally from computer to computer.  Should you choose not to pay the ransom demand, all of your computer data can be wiped clean.  All in the blink of an eye…

This is just one of many viruses, though.  We’ve known about cyber threats for years.

Unfortunately, by May 2017, we were far from ready. 

All the while, consumers have had their most private data exposed for the world to see.  Credit cards, social security numbers, bank account information, even your child’s information – all in the hands of strangers. There’s no turning back.  

Your most private information is no longer yours.  Worse, in 2016, more than 50% of Americans have been hacked and they don’t even know about it. Attackers don’t just steal your information.  They’ll change it.  

And that’s just a tiny fraction of what’s really happening.

Truth is -- hackers have us right where they want us, and we’re not nearly prepared.

Despite the scale and potential harm of such attacks, many companies and government agencies still are not prepared.  In fact, according to a survey of 600 corporate boards by the National Association of Corporate Directors, only 19% of them have an understanding of risks.

Up to 75% of all U.S. companies are not prepared.

Up to 65% haven’t devoted the time or resources to prepare.

In 2016, one of the largest attacks in history shutdown Twitter, Netflix, Airbnb, and Reddit, and caused mass Internet outages for large parts of the U.S. and Europe.  Facebook founder Mark Zuckerberg’s Twitter and Pinterest accounts were breached quite a few times because he reused the same password.  These are major companies being hacked.   Yet, each is far from prepared. 

At this point, it’s no longer a question of if the next attack will come… but when.

We’re still not ready.  But you can be, by jumping on crises as they unfold.