Cyberinvesting: what the experts think
Buying opportunity
Shares in cybersecurity firms predictably rallied following last week’s Wannacry “ransomware” assault, said Helen Reid on Reuters. Investors “treated the attack as a buying opportunity”, sending shares in the London-listed cloud network security firm Sophos up 7% to a record high. Aim-listed ECSC, which counts a sizeable group of FTSE 100 companies among its clients, shot up by 25%. In the US, Fireeye, Symantec and Palo Alto Networks were among the gainers. As Neil Campling, head of tech research at Northern Trust, observed: there’s nothing quite like an attack to “focus the minds” of company chief technology officers – and you “often see bookings growth” as a result.
Shovel-ready spending
“Any cybersecurity company will view this as an opportunity to speed up their sales cycles, but it won’t change the overall demand for solutions,” analyst Daud Khan of Canaccord Genuity told The Times. But the cyber defence market is growing like the clappers anyway. Before the Wannacry attack, IDC’S analysts forecast that the market for enterprise cybersecurity products would grow at a compound annual rate of 8% in the next two years to $40bn. Wannacry will boost that, not least because the victims included government organisations, said John Stepek on Moneyweek.com. Governments are always looking for “shovel-ready” infrastructure projects that “deliver benefits on a timeline compatible with the electoral cycle”. But they’re hard to come by. “Cybersecurity is ideal. It’s shovel-ready, it involves spending money on stuff and paying wages to people – it’s a stimulus in all but name.”
What next for Bitcoin?
The implications for Bitcoin are also intriguing, said Stepek. The cybercurrency has been performing “spectacularly well recently”. The price shot up from around $935 in March to $1,800 just before the attack. But if people start associating Bitcoin with crime networks, there may be calls for something to be done. In the short term, that could prick Bitcoin’s “mini-bubble”. Longer term, though, could it trigger the next step in Bitcoin’s evolution? “After all, the best way to undermine the criminal appeal of almost any clandestine substance or network is to bring it into the mainstream.”