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Wall Street Unfazed by Computer Hack Attacks
By David Armstrong   Fox Market Wire
If the hackers who disabled several high-profile Web sites this week meant to hurt the companies financially, the plan largely was a bust.

The day after popular Web sites eBay.com, Amazon.com, Buy.com and CNN.com reported that they had been forced to shut down due to security breaches, stock prices of the high-profile companies showed little sign of damage. Most closed the trading day down only slightly, following an overall Nasdaq decline.

The pattern was the same after Yahoo!'s site was hit Monday. The popular portal was down for close to three hours after computer attackers apparently flooded the company�s server with phony service requests, clogging up the Internet traffic and shutting down the site.

But investors were unfazed by the apparent security breach. In fact, some observers say they were impressed with how quickly and efficiently Yahoo! handled the problem.

In the wake of the attack, the company�s stock rose a little over $19 to close at $373 on Tuesday. The stock, following overall market activity, fell Wednesday by some $10.81, to close the day at $366.25

"From a financial standpoint, there isn't any impact," a Yahoo spokeswoman told Reuters Tuesday.

While the companies themselves may absorb some costs from the computer attacks, related to lost business or the price of remediation, the public value of the companies has not been affected.

"My guess is more saavy investors would see this as more transient," said Frank Prince, an Internet analyst at Forrester Research. "Only if you see some public negative reaction would you see it reflected in the stock price."

And ironically, when several companies are affected, it may cause less negative public reaction than when just one site is hit, he said.

"If you were singled out, you could suffer a pretty big PR loss," Prince said. "If everyone gets hit, the PR damage gets less and less."

That lack of widespread negative reaction was reflected in the stock prices of some of the companies targeted by hackers. Amazon.com, for instance, fell $2.87 Wednesday, to $80.25.

The attack on Buy.com threatened to mar the company�s Wall Street debut. The new Internet e-tailer saw its server shut down on the first day of trading Tuesday. Nonetheless, the attack did not seem to hinder enthusiasm for the Aliso Viejo, Calif.-based company�s stock.

Shares of Buy.com doubled on its first day of trading on the Nasdaq, from an initial offering of $12 to some $24. At Wednesday's close, the stock maintained its momentum, and was up $2.37 to $27.50.

However, eBay, the popular and much trafficked on-line auction site, seemed to take the brunt of the damage.

Its site was down for close to five hours Tuesday due to an attack similar in nature to the one that disabled Yahoo!. The site has recovered, but Ebay�s stock dropped to $164 at Wednesday's end, down some $5.75.

The attack on CNN was barely felt by the news site�s parent company Time Warner, Inc. The media company saw shares in its stock rise thirty cents to $85.50.


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