What's going on?

Yahoo reported a new, massive hack of its users on Thursdays � and its stock dropped 6% as the news reportedly endangered Verizon�s agreement to buy Yahoo�s operating company.

What does this mean?

Yahoo announced that 1 billion user accounts were compromised all the way back in 2013 in what is widely considered to be the largest hack in history. This data hack is separate from the 2014 breach that Yahoo disclosed just three months ago. The two massive data breaches inevitably raise questions over Yahoo�s security � and threaten to put a dent in its user base as customers potentially delete their accounts. In July, US telecoms giant Verizon agreed to buy Yahoo�s operating business (e.g. Yahoo Sports, Yahoo Finance, etc.) in a deal worth almost $5 billion. This news has put that deal in danger.

Why should I care?

The bigger picture: Verizon could use this as opportunity to re-negotiate the price of Yahoo�s operating business.
According to a Bloomberg report on Thursday, Verizon will look to either renegotiate the price of its purchase � or walk away altogether. Verizon has some serious questions to consider: will this affect the loyalty of Yahoo�s users? Does it create a future legal threat? Will Yahoo cost more to run as it upgrades its security? Verizon may still want Yahoo�s businesses � albeit at a lower price.


For markets: This isn�t a huge deal for Yahoo�s stock � but it still matters.

Yahoo has a 15% ownership stake in Chinese ecommerce giant Alibaba as well as a substantial stake in Yahoo Japan (which is a separate company). At a supposed valuation of almost $5 billion, Yahoo�s operating business is only a small part of the company�s overall $36 billion dollar value. That�s why Yahoo�s stock was down �only� 5% on Thursday � although, of course, that�s still a painful hit for its shareholders.