Cybersecurity booms as new stocks debut

Cybersecurity booms as new stocks debut
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The cybersecurity boom on Wall Street is growing.

This week, the second-ever cybersecurity exchange-traded fund (ETF) — which bundles multiple crime fighting companies to trade as one stock — hit the New York City-based NASDAQ stock exchange.

Prominent security firm Rapid7 also said on Tuesday it was boosting its initial public offering (IPO) goal to $111 million, a 38 percent from a previous estimate in late June.

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The ETF, which goes by the symbol “CIBR,” comes on the heels of another wildly popular cyber ETF, which trades on the New York Stock Exchange under the symbol “HACK.”

In less than eight months of trading, HACK has eclipsed $1 billion in assets. According to financial news site ETF Trends, roughly half of ETFs introduced each year fail to even reach $10 million in assets.

Security has become big business on Wall Street as hackers continue to crack the cyber defenses of retailers, banks and government agencies.

Gartner analysts project $77 billion will be spent on cybersecurity this year alone.

Security firms have benefited from the growing frequency of massive breaches in the U.S.

When Target was hacked in late 2013, exposing 40 million customers’ payment card data, the scale shocked the public. But such breaches have become common, with retailers such as Home Depot, banks such as JPMorgan and health insurers such as Anthem all suffering attacks.

Each high-profile incident has also given a slight bump to security firms’ stock.

The recent digital intrusions at the Office of Personnel Management (OPM) showed the phenomenon still exists. HACK closed at a record high the day after the initial breach was announced in early June.

CIBR hopes to capitalize on these booming market forces.

“Along with the clear benefits of an increasingly interconnected world comes the growing need to ensure the security of cyberspace,” said Ryan Issakainen, a senior vice president at First Trust, which is offering the ETF. “This presents significant opportunities for companies involved with this task.”