Block (ASX:SQ2) share price jumps 6% despite reporting a data breach

Block shares are rising despite reporting a data breach…

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Key points

  • Block shares are racing higher on Tuesday morning
  • This follows a strong rise in the tech sector on Wall Street on Monday night
  • Block's shares are rising despite the Afterpay owner announcing a data breach

The Block Inc (ASX: SQ2) share price is racing higher on Tuesday.

In morning trade, the payments giant's shares are up over 6% to $191.39.

What's going on with the Block share price today?

Investors have been bidding the Block share price today after a rebound in the tech sector offset a potentially damaging data breach.

It isn't just the Afterpay owner's shares that are rising today. The S&P/ASX All Technology Index is up a solid 2% at the time of writing, which mirrors a 1.9% gain by the tech focused Nasdaq index on Wall Street overnight.

Investors unfazed by data breach

The Block share price is storming higher today despite the company revealing that a former employee downloaded certain reports of its subsidiary Cash App Investing on 10 December. These reports included some U.S. customer information.

The release notes that while this employee had regular access to the reports as part of their past job responsibilities, the downloading of these reports occurred without permission after their employment ended.

Block advises that the information in the reports included full name and brokerage account number, and for some customers also included brokerage portfolio value, brokerage portfolio holdings and/or stock trading activity for one trading day.

Importantly, the reports did not include usernames or passwords, Social Security numbers, date of birth, payment card information, addresses, bank account information, or any other personally identifiable information. Nor did they include any security code, access code, or password used to access Cash App accounts.

Other services, such as Afterpay, were not impacted, nor were customers outside of the United States.

What now?

Block is contacting approximately 8.2 million current and former customers to provide them with information about this incident and sharing resources with them to answer their questions.

It is also notifying the applicable regulatory authorities and law enforcement, and continues to review and strengthen administrative and technical safeguards to protect the information of its customers.

And while management says that future costs associated with this incident are difficult to predict, it does not currently believe the incident will have a material impact on its business, operations, or financial results.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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