Okta problems mount

There are times when a person trips on a crack in a Manhattan sidewalk, collects themselves and continues on. There also are times when the person trips, spills their coffee on a Hell’s Angel idling at the intersection and falls forehead first toward a crosswalk button.

That second person is wearing an Okta T-shirt.

Some of Okta‘s source code was stolen in a Github hack, and that is just one of problems it began encountering this year.

Before going on, it is important to report that executives at the identity and access management software maker have played down the severity of the latest theft.

Trade publication BleepingComputer, which broke the news, has published what it says is a confidential Okta security incident note intended for customers and acknowledging the attack.

But the company says in a statement, the only repositories copied held Workforce Identity Cloud code. No Auth0 customer ID cloud code was accessed. The same is true of customer data.

Removing the proprietary nature of the copied source code, according to Okta, does not make its products less secure. The damage is not catastrophic.

Well, tell that to shareholder lawyers, whose shark senses have been tingling around Okta for weeks.

Indeed, leaders of the company were named in a shareholder lawsuit alleging that they concealed a previous hack and had bobbled a merger.

That hack, also acknowledged by Okta, happened March 1. A hacking group, Lapsus$, claimed to have broken into the systems of Okta proper. In this case customer accounts were potentially hit – 2.5 percent of customers, according to the company.

And the strained merger with Auth0 in 2021. Investing trade publication The Motley Fool said it was one of three reasons Okta’s stock has underperformed in 2022. Foreseeable staff integration problems continue to present headaches.

Then there’s Okta’s zombie status. Equity research firm New Constructs, which owns the analytical concept, says companies that are burning through cash unsustainably fast are zombies.

New Constructs added the company to its list of zombies this month, according to investor news publication MarketWatch.

New Constructs estimates that Okta has used $3.8 billion since fiscal 2018 and that is without buyouts.

And while its third quarter, ending September 30, was strong, Okta’s share prices have dived 72 percent this year. MarketWatch notes that the S&P 500 has had a tough year, too, though the index is only down 17 percent.

This is a case in which everyone on the sidewalk is watching helplessly as a fellow pedestrian bounces off a traffic pole and closer to the curb and traffic.

Article Topics

identity access management (IAM)  |  lawsuits  |  Okta  |  stocks