Why it's happening: If you haven't followed along so far, the initial drop on Tuesday came after the U.S. Federal Trade Commission announced it is taking action against the identity theft protection company for allegedly violating a 2010 order. Specifically, the FTC says, LifeLock didn't adhere to the order as it not only continued what it determined to be deceptive advertising, but also failed to adequately protect consumers' sensitive information. LifeLock, for its part, responded that it disagrees with the allegation, and is prepared to defend itself in court.
There aren't any new direct developments between LifeLock and FTC today. So it seems the latest plunge can be chalked up to a combination of continued volatility from the original announcement, as well as a predictable slew of at least four class action lawsuits that have already popped up against LifeLock, attempting to capitalize on the situation. All things considered, given the FTC action, the new lawsuits, and the almost certain possibility of LifeLock's brand being tarnished in the eyes of consumers, it's hard to blame investors for taking another step back today.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends LifeLock. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.