- Threat Beta,
FireEye Threat Beta vs. Stock Price
FireEye is one of the largest cybersecurity firms in the world. Known for their research around state-sponsored hacking threats including their incident response services, which help protect enterprise and government agencies. Potentially, a state-sponsored group of hackers from Russia breached FireEye.
The stock dropped roughly 13% of the day, which equated to $400M in lost company value. As of December 11, 2020, there was no evidence of stolen customer information, but some open-source and proprietary tools were stolen. A $400M loss was entirely related to the intangible value of FireEye’s technology, customer relationships, and brand name. The loss of customer data would have generated additional losses, which are insurable, but the majority of losses were intangible, and thereby, not easily insurable.
State-sponsored actors have world-class tools that allow them to breach sophisticated defenses; however, given FireEye’s Threat Beta score, they could have done more to reduce their breach risk. At approximately 1.6, FireEye is considered a high risk. A medium-risk rating closer to 1.0 should be the near term objective. If FireEye was a less appealing target, they may have been overlooked for easier targets.