Data Dump Could Be Nail In Coffin For Ashley Madison IPO

The story for infidelity website AshleyMadison.com keeps getting worse, as hackers that accessed a large amount of user data last month made good on threats to make the information public on Tuesday by posting it online. Avid Life Media, which operates AshleyMadison.com, confirmed on Wednesday that at least some of the data being published online is legitimate.

Hackers’ Demands

After the data breach was first reported last month, hackers demanded that the sites AshleyMadison.com, which is a platform for extra-marital affairs, and EstablishedMen.com, which pairs older men with young women, be shut down.

However, when the sites remained online, the hackers began making good on their threat to release data such as names and email addresses of Ashley Madison members.

Data Legitimate

Following Tuesday’s large data dump, Avid Life spokesman Paul Keable confirmed that there has been “some data released that is legitimate,” but added that Ashley Madison has never stored credit card information on its servers.

However, several security experts have reportedly confirmed the inclusion of known Ashley Madison users’ names and partial credit card information in the leaked data.

Doomsday Scenario

Aside from the financial ramifications of the data dump, the potential damage to the personal lives and relationships of the members could severely impact Ashley Madison’s ability to continue to lure members.

Avid Life has once hoped to raise up to $200 million by going public in London in 2015. Those plans are now on indefinite hold as the company continues damage control. After the breach was first reported, banking insiders had called the release of personal information a “doomsday scenario” for Ashley Madison.

For now, investors that want to profit on the booming business of more reputable online dating sites could consider stocks such as IAC/InterActiveCorp (NASDAQ: IACI), Spark Networks Inc (NYSE: LOV) and Jiayuan.com International Ltd DATE.