Why are Medibank shares lifting on Wednesday?

The Medibank share price dropped then popped amid the insurer's AGM.

| More on:
A woman in a crowd of executives stands out as she looks up and smiles.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Medibank share price is defying the market's downturn this afternoon, lifting 0.2% at the time of writing to trade at $2.815
  • It comes after the company hosted its AGM earlier today
  • There, its leaders delved into the major cyberattack suffered by the business, as well as its earnings and guidance

The Medibank Private Ltd (ASX: MPL) share price is in the green this afternoon after the company's annual general meeting (AGM).

As might have been expected, a major cyberattack suffered by the company was a huge topic of conversation at the event. Medibank CEO David Koczkar reiterated that not paying a ransom demanded by the hacker was "the right thing to do".

Such comments followed reports the cybercriminals were holding off from publishing more stolen information in the prospect of "something meaningful" happening today.

Right now, the Medibank share price is 0.18% higher at $2.815. Though, that's around 20% lower than it was prior to the attack – some brokers now believe the stock oversold, my colleague Tristan reports.

Comparatively, the S&P/ASX 200 Index (ASX: XJO) is down 0.36% today. The stock is also outperforming its home sector – the S&P/ASX 200 Financial Index (ASX: XFJ) has fallen 1.37% on Wednesday.

Let's take a closer look at the latest from the embattled health insurer.

Medibank share price lifts following AGM

The Medibank share price is gaining this afternoon. Its lift comes after the company's leaders doubled down on the decision not to pay a ransom for stolen data. Chair Mike Wilkins told today's meeting:

Based on extensive advice from cybercrime experts, we formed the view that there was a limited chance paying a ransom would ensure the return of our customers' data and prevent it from being published.

In fact, the advice we have had is that to pay a ransom could have had the opposite effect and encouraged the criminal to directly extort our customers, and put more people in harm's way by making Australia a bigger target.

Koczkar came in with more gusto. He called the attack "a watershed moment" and a reminder of "the new frontier in cybercrime":

We are steadfast in our resolve to NOT reward this criminal behaviour, nor to strengthen a business model that is based on extortion.

While we unreservedly apologise for the impact of the release of the data, we cannot as a community, pay criminals who are likely to continue to extort us all – particularly when there is no guarantee that the criminal would ever delete the data. As I've said before, you cannot trust a criminal.

On top of an ongoing investigation by the Federal Police and Australian Cyber Security Centre, Medibank has commissioned Deloitte to conduct an external review.

The company will begin informing the 480,000 customers whose data was recently verified as having been stolen today. It will also be contacting those whose health data is published on the dark web within 48 hours of the hackers posting it.

What else went down at the Medibank AGM?

The company's leaders also reiterated its financial year 2022 earnings, the withdrawal of its policy growth guidance, and the estimated $25 million to $35 million cost of the attack.

Koczkar also said, as of 12 November, Medibank's resident policyholder numbers had grown by around 14,500 since the end of June.

Additionally, it's seen around 14% customer growth in its non-resident business since the end of June 2022. That leaves the number of customers in its non-resident portfolio at pre-pandemic levels.

Koczkar continued:

The rising cost of living has presented a challenge for many households and yet a record number of Australians continue to take out private health insurance, putting their health and wellbeing first.

Consumers no longer see health spending as discretionary and are actually spending more on their health than before the pandemic.

Finally, shareholders passed all resolutions put forward today.

Peter Everingham and Kathryn Fagg stood for election to the company's board. Meanwhile, Linda Bardo Nicholls and David Fagan sought re-election.

Shareholders also voted on the company's remuneration report and certain amendments to its constitution. Most of the amendments related to developments in the law, ASX listing rules, and corporate governance practices.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Financial Shares

Why is this ASX 300 stock crashing 23% today?

Shareholders of this stock have been hit with some bad news.

Read more »

Happy man working on his laptop.
Financial Shares

3 things about AFIC stock every smart investor knows

These are underrated factors about the LIC.

Read more »

Frazzled couple sitting out their kitchen table trying to figure out their finances or taxes.
Dividend Investing

Here's the AMP dividend forecast through to 2026

There is some good news for AMP shareholders.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Earnings Results

Soul Patts share price struggles on falling profits

ASX 200 investment house Soul Patts reported its half year results this morning.

Read more »

Financial Shares

Buy this ASX All Ords stock for a 15% gain and 9% dividend yield

Goldman Sachs is tipping big returns from this stock.

Read more »

Man pointing at a blue rising share price graph.
Financial Shares

Big ASX news: Macquarie share price hits new 52-week high

It's been a great day to own Macquarie shares...

Read more »

a woman wearing a dark business suit holds her hand up in a stop gesture while sitting at a desk. She has a sombre look on her face.
Financial Shares

Guess which ASX All Ords stock is suspended amid takeover rumours

Another ASX share is rumoured to have received a takeover offer.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Financial Shares

Own Soul Patts shares? Here's the ASX 200 stock's result preview

What might the investment house report?

Read more »