Keith Meister, a seasoned manager of hedge funds, and a key figure on the directorial panel at MGM Resorts International, has declared that the company’s logical response to a cyberattack witnessed in September has been unfairly followed by a sharp fall in stocks.
Meister, the founder and the CIO of Corvex Management, sat down for an interview at the 13D Monitor Active-Passive Investor Summit, where he voiced his perspective on these recent events.
“MGM is a professionally run company that immediately handled the disastrous incident,” said Meister in his talk. He went on to praise the company’s rapid and efficient response, lauding the steps it took as exactly what was anticipated.
Besides being a crucial player on the director’s board of MGM, Meister is also the chair of its Audit Committee. His firm, Corvex Management, is a considerable institutional investor in MGM stocks.
The saga unwinds back to September 9th, when MGM discovered their systems had been compromised by the notorious hacker group, “Scattered Spider.” The impact was immediate and widespread, unleashing havoc across their Las Vegas Strip and regional casino hotels, crippling electronic room keys, disabling slot machines, and exposing both customer and employee data. Surprisingly, the hacker group only advanced a ransomware demand several days later.
Despite the immediate losses incurred and an expected downturn in third-quarter earnings by $100 million, MGM utterly refused to meet the ransom demand. Meister suggested that had the company felt it was the best business decision, it would have considered paying the attackers.
“Being good fiduciaries, we would have weighed the option of paying the ransom had it been the sound business decision. However, fortunately, we were on the correct side of ethical considerations,” stated Meister.
From this incident, Meister believes that the embattled MGM stocks are due for a rebound, as the worst financial impact is anticipated to be limited to the third quarter.
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