Shares of Okta (NASDAQ: OKTA) slumped on Friday, losing as much as 13.9%. By the time the market closed, the stock was still down 11.64%.
The catalyst that sent the cybersecurity specialist lower was reports that a hacker had -- once again -- infiltrated its system.
How hackers gained access
In an alert posted on its website, Okta revealed that an unidentified hacker (or group of hackers) had gained access to files "certain Okta customers" had uploaded to the company's support system.
Chief Security Officer David Bradbury noted that the perpetrator(s) used a "stolen credential" to access and view the uploaded files. He went on to say that Okta's support-case management system is separate from its main system, which "is fully operational and has not been impacted."
Bradbury said all impacted customers have already been notified, and no other users have been impacted. Okta is continuing to investigate the incident and is taking additional measures to "protect our customers."
Is it time to sell Okta stock?
This is a bad look for Okta. The company is a leader in the area of identity and access management, but this marks the second high-profile breach of its systems. In early 2022, hacking group Lapsus$ reportedly had access to the laptop of a third-party supplier for five days, even posting screenshots of the company's internal systems. Okta eventually concluded that only two customers were impacted, and the unauthorized access only lasted for 25 minutes.
However, Okta failed to notify customers of the breach for more than two months, infuriating users. Furthermore, as a company charged with securing user systems, the loss of customer trust and confidence was immeasurable.
This latest report further damages the reputation of Okta, and investors should keep a close eye out for future updates. As an Okta shareholder, I won't be selling the stock just yet, but you can be sure I won't be adding to my position any time soon.
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Danny Vena has positions in Okta. The Motley Fool has positions in and recommends Okta. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
