In today’s edition of “Big Companies Spend Obscene Amounts of Money on Things You’ve Never Heard Of,” Mastercard has decided to throw a casual $2.65 billion into the cybersecurity abyss. Their target? A company called Recorded Future Inc., which I, at first glance, thought  sounded like a dystopian sci-fi novel or an atrocious record label that resigned O-Town. 

(Source: Crunchbase) 

But nope, apparently Recorded Future is the OG of “threat intelligence” based in Somerville, Massachusetts that literally spends all day trolling the dark web of information so people like you and I don’t have to. 

In short, Recorded Future is packed with AI and data analytics capabilities that make it the Sherlock Holmes of cybercrime, minus the snarky British accent and opium addiction. Meaning Mastercard is obviously hoping this acquisition beefs up its fraud prevention and identity protection services in order to give the company more “trustworthiness” vibes - adding to its already existing business model of banking on America's impulse buying decisions that rival a druggy needing his fix. And clearly, they are willing to pay handsomely for it. 

(Source: Makeameme) 

According to reports this $2.65 billion drop in the bucket is an all cash deal, no less. No stock options or “buy one, get on free” coupons involved as this is Mastercards largest acquisition in years. 

Johan Gerber, Mastercard’s Executive Vice President of Security Solutions gave us more insight on the reason for the deal as he stated cybercrime is projected to cost the world $9.2 trillion in 2024 (and $10.5 Trillion by 2025). So as much as critics love to poke fun at Mastercard for spending a fortune on a company that monitors the shady parts of the internet for you’re stolen credit card numbers or social security numbers that were sold after visiting a not so “safe” website (iykyk) - $2.65 billion is definitely worth it to keep it’s consumers from burning in a dumpster fire full of data breaches. 

(Source: Cybercrime Mag) 

Now of course there are many cybersecurity firms out there that Mastercard could’ve chosen from to up its defenses, but Recorded Future is different. Why? Well because they’re now viewed by 1,900 clients in 75 countries as a company that effectively leverages AI (shocker) and machine learning to sift through billions of data points across both the open web and the dark web. 

(Source: Giphy) 

The goal is to look for anything that screams “cyber threat,” whether it’s a vulnerability in a company’s system, a brewing ransomware attack, or some hacker trying to auction off your aunt’s Netflix password. What’s more is that 45 national governments and over half of the Fortune 100 companies are using Recorded Future’s technology. So appears Mastercard sees massive dollar signs by bringing it into the fold.

(Source: Reuters) 

This obviously comes at a time when cyber bandits are getting more sophisticated, which is terrifying but not surprising. I mean, if they can hack the Federal Reserve, they can 100% get your ID and bank information. However, according to our boy Gerber (the executive not the baby), having that extra layer of “what’s happening out there from the cyber actors” gives Mastercard the chance to be proactive instead of just cleaning up the mess after the fact. In other words, they’re planning to outsmart the outsmarters.

(Source: Giphy) 

On the other side, how’s Recorded Future feeling about this deal? Simply put, they are pretty psyched. Christopher Ahlberg, the CEO of Recorded Future, is hyped up due to the fact that this acquisition will allow his company to scale up their operations - as their technology will integrate nicely with Mastercard’s cyber resilience, identity protection services, and probably even those fancy contactless payment thingies (that no one asked for… well, except social distancers). 

The real winners on this deal (besides Mastercard consumers), is none other than Insight Partners, the private equity firm that owned Recorded Future. They’re making out like bandits here, selling the company for $2.65 billion just four years after buying it for $780 million. That’s a pretty sweet ROI, if I do say so myself.

(Source: The Information) 

Additionally, Wall Street analysts are definitely backing one of their own on this acquisition as Moshe Katri from Wedbush Securities said this acquisition addresses an “increasingly maligned need for robust cybersecurity protection” in the payments industry. 

(Source: Yahoo Finance) 

This also follows the fact that 22 out of 26 analysts are screaming “Strong Buy” on the stock while a measly 4 are still trying to get on their big boy pants with a “hold” rating. The consensus price target is sitting around $526.43, indicating a +6.79% upside with the highest forecast flashing $570 (signaling a +15.67% upside). So yeah there’s that. 

In the end, this is a pretty nice value add that Mastercard is bringing into its arsenal of banking and credit lending. And of course, should end up boosting its bottom line of fraud protection and other hacks that siphon money away from banking institutions. 

But, but, but…

With that said, forget about Mastercards massive $2.65 billion acquisition for a minute - because, there’s an even bigger opportunity brewing right now, and it’s on the verge of something huge.

(Source: Giphy) 

You see, while Mastercard is clearly looking to up the ante in its business operations by protecting against theft, our Stocks.News premium members have already locked in a massive 96% gain from yesterday’s alert—and a short squeeze could be just around the corner. 

With all this momentum, there’s still plenty of room for this stock to take off.

Don’t miss out on what could be the second leg of this explosive run—click here to upgrade to premium and get ahead of the squeeze!

In the meantime, stay safe and stay frosty, friends! Until next time… 

Stocks.News holds positions in Netfilx as mentioned in the article.