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Marks and Spencer (LSE:MKS) Stocks have been doing well this year. Before Easter weekend FTSE 100 The stock was shaking widespread market turbulence from Trump’s tariffs to reach a nine-year high of over 411p per share.
However, during the four-day break, the company was hit by a Black Swan event. It is believed that a notorious network of hackers, known as scattered spiders, has launched a sustained business cyberattack. The supermarket revealed the news on Monday Easter.
Since then, Mark and Spencer’s stock prices have been defeated as retailers tackle the chaos. How bad can things be if we don’t end the confusion in two weeks? And is this an opportunity for brave investors to buy cheap stocks today?
What we know so far
Details have been revealed about the exact nature of “Cyber Incident”“M&S has confirmed that it is dealing with it. We know that the company has been victim of a ransomware attack. This type of malicious software prevents access to computer systems and takes important data hostage until ransom is paid.
The fallout was serious. So far, online ordering has been suspended for more than a week. Shoppers have been warned that it may take months for normal service to return. To add to the misery, recruitment was suspended, disrupted checks of the automatic storage room, leading to considerable waste.
Cybersecurity risks are a threat to many businesses in the Internet age. However, this cyber attack seems particularly bad. As massive disruption continues and reputational harm can occur, permanent damage to the M&S brand.
Stock prices sink
An investor who put £10,000 in Mark and Spencer’s shares before Cybergun was hit would have been able to buy 2,431 shares. Today, that position would have been reduced to £8,710.27. This is a painful loss of nearly 1,300 pounds in less than three weeks.
Mark and Spencer shares rose 37% in 12 months and 277% in five years. In this regard, cyberattacks have yet to cause very serious damage to long-term shareholders. Nonetheless, I think it’s likely that things will get worse.
Uncertain outlook
The big problem for both the group and the investors is uncertainty. It’s a concern that M&S appears to be completely blind due to cyber attacks. So far, the response has been largely responsive.
The scattered spiders could have been behind a similar cyberattack against US casino operators in 2023. Caesars Entertainment and MGM Resorts International. The former reportedly paid a $15 million negotiated horror tor payment, while the latter suffered a loss of about $100 million after rejecting a ransom request.
Unfortunately, M&S appears to be stuck between rocks and hard places. There’s no easy way for businesses where continuous disruption damages their revenues every day.
The outcome was encouraging before this unstable incident. In the third quarter, revenues rose 6.4% to £3.9 billion. Both the clothing, home, beauty and food businesses were positive, with sales increasing by 1.9% and 8.9% respectively.
The stocks of Marks and Spencer offer exposure to a radically high quality retail group with substantial potential. However, with the latest developments, investors should pause for thinking. I won’t invest until I can show that the company is under CyberTack’s control.
