The news at a glance
Lockheed: Taking heat for a security lapse; Music: Gaga fans take down Amazon; IPOs: Troubled Freescale stumbles out of the gate; Publishing: Martha Stewart seeks a mate; Insider trading: A fox in Nasdaq’s henhouse
Lockheed: Taking heat for a security lapseLockheed Martin, the largest U.S. defense contractor, is on the defensive this week after hackers defeated the company’s computer-security system, said Stewart Mitchell in PCPro.co.uk. The firm, based in Bethesda, Md., offered little information on the hackers’ methods, but experts theorize that they duplicated security tokens that generate a constantly changing stream of passwords. In March, thieves stole a cache of codes for such SecurID tokens from the RSA security division of EMC Corp. Experts are now asking why Lockheed continued to use the tokens more than two months after RSA alerted clients to the theft. At least one other defense company heeded the warning and stopped using SecurID tokens altogether.
Lockheed insists that neither its data nor that of its customers was compromised, but some computer-security executives have their doubts, said Lindsey Robbins in the Maryland Gazette.net. Vaughn Thurman, president of technical consultants Swift Systems in Frederick, Md., said it was a “statistical impossibility” that hackers with sufficient financing and sophistication to break through Lockheed’s digital firewalls would have emerged empty-handed. Any information the hackers obtained, however, would likely be encrypted and difficult to decipher.
Music: Gaga fans take down AmazonAmazon.com’s Lady Gaga promotion proved a little too successful, said Stu Woo in The Wall Street Journal. The online retailer featured the flamboyant singer’s new album, Born This Way, as its “Gold Box Deal of the Day” last week, and so many of her fans grabbed the chance to download it for 99 cents that Amazon’s overloaded servers shut down. Amazon assured frustrated fans, dubbed “Little Monsters,” that their orders would be honored, and it held a second one-day promotion later in the week after adding server capacity.
IPOs: Troubled Freescale stumbles out of the gateInvestors gave the initial public offering of unprofitable chip-maker Freescale a tepid reception last week, said Jason Kelly and Ian King in Bloomberg.com. Underwriters had to slash the offering price to $18 a share from a projected $22 to $24. The IPO raised about $783 million, which Freescale will use to pay down its $7.6 billion in debt. The offering values Freescale at about 47 percent less than what a consortium led by Blackstone Group paid for the company in 2006.
Publishing: Martha Stewart seeks a mateMartha Stewart Living Omnimedia has hired Blackstone Group to find it a buyer or strategic partner, said Claire Atkinson in the New York Post. But analysts say a breakup of the company appears to be the most likely outcome. “Few companies have the same set of overlapping businesses,” which include house paints, bed linens, and, of course, the company’s flagship magazine, Martha Stewart Living. The company’s biggest growth potential seems to be in merchandising, analysts say, as it lacks the scale to compete with publishing’s heavyweights.
Insider trading: A fox in Nasdaq’s henhouseA Nasdaq official responsible for monitoring suspicious stock trading has confessed to conducting illegal trades of his own, said Peter Lattman in NYTimes.com. In a “brazen insider-trading scheme,” Donald Johnson used his wife’s name to make trades based on confidential information that he had as a senior executive on the Nasdaq exchange’s market intelligence desk. “Nasdaq’s failure to protect its corporate clients’ secret information is a major embarrassment for the exchange,” which competes fiercely with the New York Stock Exchange and foreign bourses. Johnson, 56, who allegedly earned $750,000 on the trades, faces up to 20 years in prison and a civil suit.