If you were trying to gain people’s personal information nothing would be better than looking at the files of Equifax. The credit companies of Equifax, Experian and TransUnion are the big three credit bureaus. They monitor everytime you pay a bill and for that, the banks and other credit granting institutions pay them for their service. If you apply for credit, one of or more of these companies will be notified and from the amount of times you apply for credit and the method you pay your bills helps give you a credit score. All of the companies allow you assess to your credit rating and will sell you a service when a company asks to look at your credit rating.

For a company to have a breach in their security automatically sends their stock on a downward path, Equifax responsibilty dropped from $143 to $96, which meant perhaps the stock is a buy. There are two things to weigh, could another company do the same thing as Equifax? The answer is yes and no for yes they can do the same thing but the big three dominate the industry and to gather all the information to be able to sell to all the credit granting institutions creates high barriers to entry. Equifax has offered free services to all the 143 million people who information was or could have been compromised and likely many of them will accept.

The other issue is fines from the government or anyone willing to sue Equifax for breach of their personal security. In the world of companies being sued for many things it would be expected a number of lawsuites would come forward, but would they be enough to cause the disappearance of the company? If the company does not have a huge magnitude of lawsuits, one could easily see the company returning to where it was.

Linking to dividend paying stocks, all companies have information from their customers and if a cyber breach happens the stock will fall. That is the responsible thing from investors because the company has to double down on security and more importantly reassure and keep its customers. How well it does that or how poorly senior management response is how you judge the outcome. If you believe a stock you own is doing it well, there is fewer reasons not to buy. If you think they do poorly, find alternatives.

There are more questions than answers, till the next time – to raising questions.