What happened
The stock market was having a generally negative day on Tuesday, with all three major indexes in the red as of 11:30 a.m. ET. However, fintech giant Block (SQ +0.20%) -- formerly known as Square -- was a major underperformer, with shares down by 6% for the day.
NYSE: SQ
Key Data Points
So what
In addition to general downward pressure on tech stocks today, there's one major news item that is pushing Block lower, and it's a phrase that investors never want to hear -- a data breach.
Image source: Block.
Specifically, Block reported that a former employee downloaded reports from the Cash App after being terminated and that the reports contained information about its customers.
Now what
First off, it's important to take this data breach with a big grain of salt. The reports accessed by the former employee contained full names, brokerage account numbers, and account values and activity. They did not contain Social Security numbers, birth dates, usernames, passwords, or credit/debit card information. So, as far as data breaches go, it could have been much worse.
Second, while Block said it has contacted 8.2 million customers about the incident, it also went on to say that the breach isn't expected to have a material impact on the company's results. So, although the market is reacting negatively today, it could be a buying opportunity in the fintech giant if the breach turns out to be largely a nonevent in the long run.
