Latest news with #financialrisk
Entrepreneur
3 days ago
- Business
- Entrepreneur
Data Breaches Now Cost More Than Just Data
"The 8% drop in Victoria's Secret's stock, translating to over USD 150 million in lost market value, shows that cybersecurity breaches are now perceived as significant financial risks," says Manoj Joshi, Group CEO, SA Technologies Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. One of the primary reasons ransomware remains the favourite cyberweapon among malicious actors is its sheer profitability. In 2023 alone, ransomware gangs extorted over USD 1.1 billion in cryptocurrency payments from victims globally, according to blockchain analytics firm Chainalysis. In India, nearly one million ransomware detections were reported in the past year alone. According to Palo Alto Networks' Unit 42 Extortion and Ransomware Trends (Jan–Mar 2025), the country experiences one ransomware incident for every 595 detections and one malware incident for every 40,000 detections, underscoring the volume and scale of cyber threats. The volatile geopolitical climate makes the threat landscape even more complex. The industry is observing more trends in state-backed actors than ever before. "In a rapidly transforming country like India, organisations are navigating a complex mix of modern and legacy changes. The rapid adoption of AI has empowered organisations and threat actors alike. This highlights the urgent need for organisations to bolster their cybersecurity framework and incorporate comprehensive security measures to fortify their defences against complex ransomware campaigns," said Huzefa Motiwala, Senior Director, Technical Solutions, India and SAARC, Palo Alto Networks. Business fallout: the Victoria's Secret case The impact of ransomware isn't limited to temporary technical disruptions; it strikes at the heart of business continuity and brand trust. On 28 May 2026, lingerie retailer Victoria's Secret took its website offline following a cyberattack. Though the exact nature of the incident remains undisclosed, such outages are typically attributed to ransomware. Commenting on the outage, officials said on the website, "Valued customer, we identified and are taking steps to address a security incident. We have taken down our website and some in-store services as a precaution. Our team is working around the clock to fully restore operations… We appreciate your patience during this process. In the meantime, our Victoria's Secret and PINK stores remain open and we look forward to serving you." Following the incident, Victoria's Secret saw an 8 per cent drop in its share price. "The 8 per cent drop in Victoria's Secret's stock, translating to over USD 150 million in lost market value, shows that cybersecurity breaches are now perceived as significant financial risks," explained Manoj Joshi, Group CEO, SA Technologies. Joshi further noted that investor reactions are swift and driven by anticipated disruptions to operations, potential regulatory liabilities, and reputational damage. "With the average cost of a data breach reaching USD 4.45 million in 2023 (IBM), it's evident that robust cybersecurity isn't just an IT concern—it's fundamental to investor confidence and long-term enterprise value," he added. Long-term damage The brand reputation damage from a single cyberattack can be long-lasting, especially in trust-driven sectors like retail, healthcare, and BFSI. "Absolutely," confirms Joshi. "A single attack can have a lasting impact on brand credibility. Yahoo's data breach, for instance, slashed USD 350 million from its acquisition value during the Verizon deal," Joshi said. While citing the example from Ping Identity, Joshi emphasised, "Consumers aren't quick to forgive—81 per cent say they would stop interacting with a brand online after a data breach." Echoing the same sentiment, Amit Jaju from Ankura Consulting said, "Cyberattacks can cause irreversible harm to brand trust and consumer loyalty. In Victoria's Secret's case, the reputational hit is significant. Studies show up to a third of customers may abandon a brand following a breach. In India, where consumer trust is built gradually, brands must invest in transparency and long-term recovery strategies to avoid lasting damage." Lessons in data protection The Victoria's Secret breach is a textbook example of why organisations must go beyond perimeter security. "This breach is a wake-up call for proactive cybersecurity," says Joshi. "Businesses must invest in real-time threat detection, adopt zero-trust frameworks, and maintain clear, transparent communication when incidents occur. One often overlooked aspect is third-party risk—Verizon's 2025 DBIR shows that vendor-related breaches have doubled to 30 per cent. Strong vendor governance is essential," Joshi explained. For consumers, Joshi suggested simple but consistent practices like using strong passwords, enabling two-factor authentication, and avoiding suspicious links.
Yahoo
29-05-2025
- Business
- Yahoo
Here's Why Longeveron (NASDAQ:LGVN) Must Use Its Cash Wisely
Just because a business does not make any money, does not mean that the stock will go down. For example, although made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed. So should Longeveron (NASDAQ:LGVN) shareholders be worried about its cash burn? For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. First, we'll determine its cash runway by comparing its cash burn with its cash reserves. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. When Longeveron last reported its March 2025 balance sheet in May 2025, it had zero debt and cash worth US$14m. Looking at the last year, the company burnt through US$17m. That means it had a cash runway of around 10 months as of March 2025. That's quite a short cash runway, indicating the company must either reduce its annual cash burn or replenish its cash. Depicted below, you can see how its cash holdings have changed over time. See our latest analysis for Longeveron Whilst it's great to see that Longeveron has already begun generating revenue from operations, last year it only produced US$2.2m, so we don't think it is generating significant revenue, at this point. Therefore, for the purposes of this analysis we'll focus on how the cash burn is tracking. It seems likely that the business is content with its current spending, as the cash burn rate stayed steady over the last twelve months. While the past is always worth studying, it is the future that matters most of all. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company. While Longeveron is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn. Longeveron's cash burn of US$17m is about 83% of its US$20m market capitalisation. That suggests the company may have some funding difficulties, and we'd be very wary of the stock. Even though its cash burn relative to its market cap makes us a little nervous, we are compelled to mention that we thought Longeveron's cash burn reduction was relatively promising. Once we consider the metrics mentioned in this article together, we're left with very little confidence in the company's ability to manage its cash burn, and we think it will probably need more money. On another note, we conducted an in-depth investigation of the company, and identified 5 warning signs for Longeveron (2 are potentially serious!) that you should be aware of before investing here. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts) Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
26-05-2025
- Business
- Bloomberg
South Africa Has Too Many Retail Stores, Pick n Pay CEO Says
South African retailers are opening too many new stores, putting their financial viability at risk, according to Pick n Pay Stores Ltd. Chief Executive Officer Sean Summers. The top five retailers in Africa's most-industrialized economy opened more than 700 stores last year, according to company filings. They have set up 230 already this year.
Zawya
21-05-2025
- Business
- Zawya
Family or not - business is business: Consequences of reckless trading
Doing business with family members can be a double-edged sword. On the one end, there is shared trust and understanding which creates a strong foundation. On the other, there may be an overlap of personal and professional dynamics. This may be a fertile ground for conflict and financial risk. This was evident in the case of Badenhorst v De Kock 2024, wherein Janisch AJ held that the respondent, Jacobus Francois De Kock traded recklessly and was personally liable for the debt incurred by Good Hope Holdings (GHH) for the purchase of shares and loan accounts from the applicant, Mariana Badenhorst, his sister. The legal principles pertaining to reckless trading and its consequences are explored through the analysis of the case. Family feud led to sale of shares In or around 2009, Badenhorst purchased a minority interest in Bunker Hills Investments on recommendation by her brother, De Kock. A few years later, De Kock, on behalf of GHH, offered to purchase her shares and loan accounts in Bunker Hills. Badenhorst contended that her decision to sell her shares and loan accounts was due to lost trust in the quarry business of Bunker Hills. However, her brother contended that the decision was due to a family feud. GHH, represented by De Kock, purchased his sister's shares and loan accounts in Bunker Hills for R4,625,000. The purchase price was to be repaid in monthly instalments over a period not exceeding 24 months, failing which an amount of R750,000 per annum (being capital growth) would accrue. GHH was an investment holding company of whom De Kock was the sole director and shareholder. At the outset, GHH failed to meet its payment obligations and after Badenhorst approached the court, the parties concluded a settlement agreement in terms of which the GHH would make payment of the overdue amounts in addition to the instalments due under the share sale agreement. De Kock failed to comply with the terms of the settlement agreement and after approaching the court for an order enforcing the settlement agreement, Badenhorst obtained judgment against her brother for an amount of R4,224,000 including interest. GHH again defaulted on its obligations, and with a sum of R4,035,000 still outstanding, Badenhorst launched liquidation proceedings and accordingly obtained a provisional liquidation order in September 2021 and a final order in January 2022. Before the dividend due to the creditors had been determined and prior to the approval of the liquidation and distribution account, Badenhorst approached the High Court again. But this time seeking an order, in terms of section 424 of the Companies Act 61 of 1973 (the '1973 Act'), that her brother be held personally responsible for the debt of GHH, contending, amongst other things, that the business of GHH was at all relevant times carried on recklessly by her brother, and that he was knowingly a party thereto. Reckless trading Section 424 of the 1973 Act, which still finds application despite the Companies Act 71 of 2008 (the '2008 Act') coming into operation provides that: 'When it appears, whether it be in a winding-up, judicial management or otherwise, that any business of the company was or is being carried on recklessly or with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court may, on the application of the Master, the liquidator, the judicial manager, any creditor or member or contributory of the company, declare that any person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court may direct.' [Underlining added] Having regard to the above definition, in Philotex (Pty) v Snyman, Braitex (Pty) Ltd v Snyman (1992) SCA stated that the test for recklessness is: Unreasonable vs grossly unreasonable conduct To prevent the above test from making it impossible for directors to take entrepreneurial risk in carrying on the business of a company, the court in Philotex distinguished between unreasonable conduct and grossly unreasonable conduct. The court also noted that each case needed to be determined on its own facts and involve a value judgment. In making the distinction, the court stated that a person's conduct would be unreasonable where it fell short of the standard of conduct of the reasonable businessman but could not fairly be described as 'gross'. The court noted that to require virtual certainty of non-payment would impose an unduly heavy burden on a plaintiff to succeed in section 424 proceedings. In summary, the court in Philotex stated that 'the incurral of debts on behalf of a company at a time when no reasonable business person would consider that the company would be able to satisfy those debts when they fall due would prima facie demonstrate reckless trading even if the directors bona fide thought otherwise.' General manner of carrying on business De Kock's knowledge of the conduct of GHH was not in dispute, given that he was at all relevant times the sole director of GHH, no third parties were involved, and he did not contend that he was not knowingly a party to every act of GHH. The court focused on ascertaining whether De Kock caused the business of GHH to be carried on recklessly. To assess this, the court considered three areas, namely the conclusion of the shares agreement and the incurral of indebtedness by GHH to Badenhorst, the conclusion of a settlement agreement, and De Kock's general manner of carrying on the business of GHH over the period relevant to the application. Each area is dealt with separately below. 1. Sale of shares agreement To determine whether De Kock acted recklessly in concluding the sale of shares agreement, the court needed to establish 'whether a reasonable business person in the position of De Kock would have assumed the debt and instalment payment obligations on behalf of GHH, having regard to the GHH's ability to meet those payment terms'. The court emphasised that the determination had to be made 'on the facts and circumstances existing at the time of concluding the sale of shares agreement'. De Kock gave evidence that GHH, as an investment holding company, did not have income, but rather assets in the form of loan accounts. As such, GHH was solely dependent on its ability to call up loan accounts with its operating subsidiaries. De Kock stated in his answering affidavit that the money that GHH intended to use to pay the purchase price had been indirectly invested in Safepro and that as a result of Safepro not receiving payment from a joint venture partner, it was unable to fund suppliers or repay its loan account with Two Ships, resulting in Two Ships being unable to repay its loan with GHH. This ultimately affected GHH's ability to pay the instalments in terms of the sale of shares agreement. The court found De Kock's evidence unsatisfactory. Given the vagueness proffered by De Kock in relation to how he considered that GHH would be able to meet its payment obligations, the court was not able to conclude, on the facts, that at the time that the sale of shares agreement was concluded, GHH had a reasonable expectation of being able to meet its payment obligations. Similarly, De Kock's testimony in court and in the insolvency enquiry was vague, and the language used in the insolvency enquiry enunciated that of 'hope' and 'uncertainty'. The court determined that nothing De Kock said confirmed that there was a reasonable prospect of GHH meeting its payment obligations. This position was reinforced by the fact that GHH failed to meet such obligations. The court found that not only was there no concrete or reliable expectation at the time of the conclusion of the sale agreement that GHH would be able to meet the payment terms, but the asset acquired was seemingly worthless and De Kock merely used GHH as a vehicle to appease his sister amid the family tension. The court therefore determined that De Kock took an unjustifiable risk on behalf of GHH and that he was party to the reckless carrying on of the business of GHH when committing it to acquire the Bunker Hill shares on the terms set out in the sale agreement. 2. Settlement agreement At the time of concluding the settlement agreement, the events which resulted in Safepro being unable to repay its loan with Two Ships had occurred, and it would therefore have been clear that Two Ships would be unable to repay GHH. Despite this, De Kock committed GHH to more onerous terms contained in the settlement agreement and committed to it being made an order of court. Other than proceeds from the sale of a property, the value of which was far below the debt owed to his sister, the court found that there was no indication of any other source of income to pay the balance of the instalments, and no source of capital should the acceleration clause be triggered, which seemed inevitable. As a result, the court concluded that De Kock, again, showed little to no regard for the success and well-being of GHH and caused GHH to incur debts with no reasonable likelihood of being able to fulfil its payment obligations. The court was satisfied that this conduct met the requirements for recklessness set out in the aforementioned case law. 3. General conduct of De Kock It was submitted by De Kock that GHH was an investment holding company and its ability to pay its debts was dependent on receiving repayments from its operating subsidiaries. Repayment was therefore not certain. Furthermore, GHH had little control over receiving loan repayments from its subsidiaries because repayment was dependent on the ability of the subsidiaries to repay same to GHH. De Kock, in his evidence at the enquiry, reflected that when he made an agreement to pay a creditor, he put the underlying companies to terms and they undertook to repay same as and when they were able in terms of their own cashflows, which did not happen. The court expressed the view that this demonstrated that De Kock was prepared to commit GHH to payment terms before approaching the operating companies for the money it needed to do so and without knowing whether the operating companies were able to repay the money needed by GHH to meet its payment obligations. De Kock expressly acknowledged that any non-payment by GHH in respect of a debt owed to loan creditors would be restructured with the particular creditor, with the knowledge, co-operation and consent of all GHH's other creditors, other than his sister. This meant that GHH adopted a business model where its survival was dependent upon the goodwill and patience of its creditors to agree to extended payment terms, which often entailed further commitments being made by GHH. The court was satisfied that the ongoing conduct of being financed by external debt instead of liquidating a commercially insolvent company was reckless in itself. De Kock, under those circumstances, committing GHH to substantial new and onerous obligations to his sister without any increased expectation of income only reinforced that view. The court concluded that De Kock's conduct in the transaction between GHH and Badenhorst and in relation to the general conduct of GHH's business was so far removed from how a reasonable director would conduct himself, warranting the conclusion that De Kock acted recklessly. The court found that Badenhorst, in principle, had established a basis for relief against De Kock under section 424 of the 1973 Act. Causal link between the recklessness and the debt The court noted that where the requirements of section 424 are met, it retains a discretion whether to declare De Kock personally liable for the debts of the company and the amount of such liability, if any. In exercising its discretion, the court was satisfied that Badenhorst had shown a causal link between her brother's recklessness and the debt in issue. In addition, the court found that the conduct of De Kock in relation to the Bunker Hill transaction was markedly similar to GHH's business, and the same criticism would apply to the conduct of De Kock in relation to the Bunker Hill transaction and the general way he conducted the business of GHH. The court found that De Kock was liable to his sister in the amount of R4,035,000 plus interest and made a cost order in her favour. Closing remarks Reckless trading poses significant risks. The Badenhorst case serves as a cautionary tale of the dangers thereof, and highlights that the separate personality of an entity does not guarantee the persons carrying on the business of that entity, an escape from personal liability. Two important lessons can be learned from this case: - Before incurring debt on behalf of an entity, it is essential to ensure that the entity is capable of repaying the debt timeously; and - before being owed a debt, it is essential to do the necessary due diligence to establish that the debtor has the financial means to repay the debt – trust in the debtor's ability to repay the debt is not sufficient. Before you enter a business transaction, regardless of which side of the transaction you are on, think twice! All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Yahoo
17-05-2025
- Business
- Yahoo
I'm a Finance Expert: 4 Financial Risks of Co-Signing Loans
When your best friend or family member asks you to co-sign a loan, it's easy to say yes. But what feels like a quick favor turns into a long-term financial burden. Co-signing a loan is more than vouching for someone's creditworthiness. Learn More: Consider This: GOBankingRates spoke with Ashley Morgan, debt and bankruptcy lawyer and owner at Ashley F. Morgan Law, to discuss the financial risks of co-signing loans. A lot of people assume that co-signing means promising to repay the loan when the borrower defaults. However, 'when you co-sign a debt, you are responsible for all the payments in the beginning,' Morgan said. 'This means if the account is charged or in collections, a creditor can collect the full amount from you.' Before you sign the dotted line, ensure that you're in a position to cover the loan payments if anything happens. Find Out: A co-signed loan appears on your credit report. So, any late or missed payments can negatively impact your credit score. 'If it lowers your credit, then it may make it difficult to qualify for your own loans,' Morgan noted. It can also impact your debt-to-income ratio — the percentage of your monthly income that goes toward existing debts. If you're planning to take out a mortgage, buy a car, or even apply for a credit card, lenders might view you as too risky to extend you more credit. What if the person you co-signed for files for bankruptcy? You'd assume the debt is wiped clean, right? No, you're still on the hook. 'If you co-sign for a debt and the other person files for bankruptcy, you're still responsible for the debt,' Morgan warned. 'This means that the original borrower can discharge their obligation on the debt, but yours remains unless you also file for bankruptcy.' You might think you can remove yourself from the loan later, but it's not easy. 'Being removed as a co-signer is difficult. It typically requires refinancing the full debt,' Morgan said. That's why you shouldn't treat co-signing as a short-term favor. It's a long-term financial commitment. More From GOBankingRates Here's How Much Cars Made in the US Cost Compared to Mexico, Canada and China I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money 4 Grocery Items To Buy Now Before Tariffs Raise Prices This Summer 4 Affordable Car Brands You Won't Regret Buying in 2025 Source Ashley F. Morgan Law, 'Ashley F. Morgan Law, PC | Bankruptcy Attorney | Tax Resolution.' This article originally appeared on I'm a Finance Expert: 4 Financial Risks of Co-Signing Loans Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
