Medibank Private Ltd (ASX: MPL) shares have come under considerable selling pressure following the company's massive data breach last month.
On 26 October, when the S&P/ASX 200 Index (ASX: XJO) private health insurer emerged from a multi-day trading halt, shares plunged 18.1% over the day.
What's going on with the data breach?
In a nutshell, hackers — apparently Russian-based — stole sensitive data from 9.7 million of Medibank's former and current clients. That data includes customer names, dates of birth, addresses, phone numbers and email addresses.
The cybercriminals also accessed health claims data for approximately 480,000 customers.
Earlier this week, the healthcare stock said it would not cave into any ransom demands from the hackers, which saw Medibank shares rise on the day.
The hackers responded by threatening to publish all of the customer data on the dark web. A threat they began to follow through with yesterday.
Do Medibank shares now represent a buying opportunity?
Medibank shares remain down 21% since the company exited its trading halt on 26 October.
So, is it a buying opportunity?
Eliot Hastie, markets analyst at Australian brokerage platform Stake, said that for the platform's clients, the answer looks to be yes.
"Stake customers have seen this as a buying opportunity, with a 1,426% increase in buys last month, suggesting that many are still positive about Medibank's long-term outlook," he said. "In fact, Medibank saw the biggest change from sales to buys of all Australian stocks in October when compared to September."
According to Hastie:
Cyber security incidents often cause an instant hard shock to a share price, but strong companies have generally been able to recover over the long term. That said, there's no way of knowing the true consequences of Medibank's current breach.
There has been a suggestion of a class action lawsuit, which could affect the share price over a longer period, but this situation is still developing, and its impact is yet to be seen.
If you're considering investing in Medibank shares, there's also the potential income stream to keep in mind.
As at yesterday's closing share price of $2.77, Medibank pays a trailing dividend yield of 4.8%, fully franked.
How have Medibank shares been tracking in 2022?
The Medibank share price was in the green, significantly outperforming the ASX 200 over the calendar year, right up until the big selloff on 26 October. That selling now sees Medibank shares down 19% in 2022, compared to an 8% loss posted by the benchmark index.
