Marriott Pays $52 Million Fine in Horrific PR Nightmare... (Shares Skyrocket +13.33% MTD)

When it comes down to it, data breaches are the corporate equivalent of spilling coffee on your laptop—except instead of a ruined keyboard, you’re potentially ruining millions of lives by leaking their personal info. Annnnd guess who did just that? If you guessed Marriott, then you’d be correct.

(Source: Cyberscoop) 

In short, the hotel behemoth just coughed up a cool $52 million to settle with 50 state attorney general sover one of the messiest data breaches we’ve seen in a minute. Oh, and the FTC is now in on it too, because the best use of our tax dollars is when government agencies overlap to solve the same problem, amirite

(Source: Giphy) 

Anyways, let’s rewind a bit since this colossal clusterf**k has been brewing for quite some time. In fact, when I say quite some time, I mean back in 2016 during Marriotts $13.6 billion acquisitions of Starwood Hotels (which ended up being a corporate horror show).

Fast forward to September 2018, and Marriott caught wind that the mansion that they had bought two years earlier had been infested with termites since 2014 - except these so-called “termites” were actually hackers. Hackers who had made off with the personal info of 500 million people (with 132 million being from the U.S.). We’re talking names, birthdates, credit card numbers, and even passport info. Ooof

(Source: McClatchy DC) 

And in a move that screams “corporate discretion,” Marriott took a nice, leisurely three months to notify the public after discovering the breach (lol). Translation: While half a billion individuals' info was floating around for sale on the dark web, Marriott was trying to figure out how bad of a PR nightmare this was going to be. 

(Source: Giphy) 

But alas, justice has been dealt, and now Marriott has been hit with a $52 million fine, right? Well sort of. You see, $52 million may sound like a hefty sum until you  remember that Marriott raked in $3.08 billion in profit last year alone. That’s like... 1.6% of their 2023 profits. So yeah, this is less of a punishment and more like a parking ticket for Marriott. 

(Source: Giphy) 

In fact, Connecticut Attorney General William Tong had some strong words regarding the situation: “Companies have an obligation to take reasonable measures to protect consumer data security. Marriott clearly failed to do that.” Nice soundbite, but again, does a $52 million really make a $50 billion company break a sweat? Highly doubt it. 

Which is why for this reason, Marriott’s stock brushed off the bad news - ripping 13.33% this month (contributing to its 16.46% YTD gains and 36.13% 12 month gains). What’s more though, is that this isn’t Marriott’s first rodeo with data breaches, either. 

For instance back in 2020, the UK’s Information Commissioner’s Office hit Marriott management with a $123 million fine over the same issue - however that fine got slashed down to a laughable $23.8 million.  And this case isn’t any different. 

So with that, what’s the takeaway here this Sunday? Well, in the land of the free, home of the brave, the ones with the deep pockets walk off unscathed, once again. Sure, Marriott is saying all the right things, about tightening up security, but let’s be honest - these kinds of breaches are happening left, right, and twice on Sunday across corporate America. Whereas, right now, it feels like companies are more interested in spinning the damage control wheel than actually fixing the root of the problem.

(Source: Giphy) 

But hey, whatever keeps the profits rolling in, right? In the meantime, if you’re a Marriott investor: congrats, you dodged another bullet with a 16.46% YTD gain. And if you’ve stayed in a Marriott recently, well then you may keep an extra-close eye on your credit card statements for the time being. Hell, if water (see: American Water Works) and hotels aren’t safe from hackers… ain’t nobody safe. 

As always stay safe and stay frosty, friends! Until next time… 

P.S. I know It’s the weekend, so I’ll make this quick. We've successfully predicted up to 16 triple-digit (100% or more) opportunities nearly every single week for the past four months... and our next alert is set to be released early next week. Meaning, if you haven't done so yet, I'd highly suggest clicking here ASAP and joining the 2,000+ Stocks.News Premium Members.

Stocks.News does not hold positions in companies mentioned in the article.