When most people read the terms cyber crime, cyber security, hacking or something similar a doom-laden future will often be conjured up.
We have become all too aware of the growing threat from botnets, phishing attacks, ransomware and a multitude of other risk to our online security as the world increasingly goes digital.
Providing solutions is big business and can be very lucrative.
So why is FTSE 250 firm Avast (AVST) today’s biggest faller on the FTSE All-Share despite there being no obvious news to spark the sell-off? Read on to discover why.
READ MORE ON AVAST HERE
Czech Republic-based Avast is one of the world’s biggest cyber security providers to consumers, with more than 435m people worldwide using its Avast and AVG firewall, anti-hacking and anti-virus tool kits.
MOOD SET IN THE US
We believe another fairly well-known cyber firm is indirectly behind Avast's share price woes as its latest news has negative read-across to the broader cyber security sector.
Symantec is quite well known and its IT software security packages are often sold to consumers when they upgrade a laptop, for example. It also sells similar products to business on about a 50:50 enterprise /consumer split.
The business, listed on the tech hefty US Nasdaq, reported full year results overnight, and they made pretty poor reading and led to its boss resigning.
The numbers show the company closed out the year to 31 March 2019 ‘with a whimper’ as one analyst describes today, missing expectations on almost all fronts as adjusted revenues fell 2.2% to $1.19bn alongside adjusted operating profits crumbling 20% to $347m.
MISSES ON REVENUE AND PROFITS
Symantec’s figures were versus consensus figures of $1.21bn and $362m respectively. The figures also showed profit margins slumping from 36% to 29%.
Full year numbers weren’t much better, with revenues down 4% to $4.76bn and profits down 15% to $1.44bn, again missing forecasts on both measures.
The upshot saw the immediate departure of chief executive Greg Clark, who has been running the show since 2016.
Nasdaq doesn’t open for trading until this afternoon but the grey market (a sort of unofficial trading market) implies a rough 15% slump in Symantec’s share price is on the cards later, from last night’s $22.17 close to something around $18.90.
The read-across to Avast’s own trading conditions is clearly spooking investors, hence its sell-off today, despite its own relatively upbeat update just last month.
