When it comes to working the stock market you’ll want to make sure that you buy all of the right stocks to get the highest return on your investment. LifeLock has been going through a variety of legal proceedings particularly in terms of the FTC (Federal Trade Commission) which put their company in a financial predicament. When you start working on your portfolio, you might be considering whether it makes sense to buy LifeLock stocks now or to stay away from the company name. Below are some important factors to take into consideration.
Stock in July 2015
The largest drop in stock that LifeLock experienced was in July of 2015 when the general public first found out about their legal disputes with the FTC. There were terms set in 2010 that the company did not adhere to, resulting in deceptive advertising in terms of the personal information of their customers. There were 2 trading halts and then the stock continued trade but for a 49% less price.
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The Federal Trade Commission Settlement
Instead of denying the claims, LifeLock agreed to settle with the FTC for $116 million which was something that the general public was hoping would happen. When the company made the announcement on the 28th of October, the stock rocketed by 44% and closed at $13.94 on the NYSE (New York Stock Exchange).
LifeLock and Investors
One of the main concerns that traders had with LifeLock stocks was whether the company would be able to dig themselves out of the mud after settling for such a large sum of money. Though it is now known that the cost of the settlement was something that investors had been expecting all along. In 2015, LifeLock received over $585 million in revenue, $20 million of which they had already set aside to help resolve any litigation between themselves and the FTC. The other $96 million fell comfortably within their total profits, leaving the company with a substantial sum at the end of the day.
Should I Buy LifeLock Stocks?
Since the outing of their security issue, LifeLock has hired a variety of independent security firms to assess how they protect their customer’s information, which is something that the public is responding positively to. Also, you won’t have to worry about the company going under as they seem to be bringing in enough profits to cover all legal proceedings and settlements. There wouldn’t be any damage associated with buying some LifeLock stocks for your portfolio.
