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MGM likely has $200m cyber insurance following data breach

September 22, 2023 World Casino & HotelCrime & Legal

Jordan Bender of JMP Securities says that MGM probably has a $200 million cyber insurance policy that covers business outages and payments to hackers. it can be recalled that MGM experienced a cyberattack last week that affected the operation of its properties across the US.

Bender said that if MGM had some short-term costs and insurance rates went up, it wouldn’t be a big deal for a company that brings in $4.7 billion in cash this year.

This review is similar to what Caesars Entertainment did after a similar ransomware attack. According to a Form 8-K statement with the SEC, Caesars spent between $15 million and $30 million to stop the attack. The cost was covered by its cyber insurance policy.

Bender thought that the company might have to pay between $30 million and $50 million in online debt, which would probably be covered by insurance. MGM has not yet said that the attack was caused by “ransomware,” but the SEC requires that any such payment be reported to investors within four business days.

Even though the attack caused the stock to drop by 6% and the market value to drop by $850 million, Bender is still positive about MGM’s comeback. He kept the “outperform” rating and the $60 price goal, which means that the share price could go up by more than 50% from where it is now. Based on how the industry has changed over time, it looks like earlier data breaches have not had a big effect on long-term income or stock prices.

As of Wednesday, MGM Resorts International said that its US gambling rooms are now running normally after a ransomware attack that started on September 10.

Original story by: Casino.org

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