Dropbox stock falls after Bloomberg reports data breach

Investing.com -- Dropbox Inc (NASDAQ: DBX) shares fell 1.8% in after-hours trading Tuesday after Bloomberg reported that hackers breached thousands of user accounts and accessed data stored on the cloud-storage platform.

About 5,000 Dropbox accounts were compromised by hackers last month, who accessed files on less than a third of them, according to a company statement cited by Bloomberg. Company spokesperson Tim Rathschmidt said Dropbox has since notified regulators and affected users.

The unauthorized access occurred between Aug. 4 and Aug. 21, according to notification emails sent to users on Monday. Some users were told their files were viewed and downloaded during that period, while others received notifications stating there was no evidence of such activity.

The breached accounts were not protected by multifactor authentication, Rathschmidt said. Hackers gained access by exploiting a vulnerability in Lenovo Group Ltd's email verification process, which allowed them to register Lenovo IDs using Dropbox users' email addresses without authorization. These Lenovo IDs were then used to authenticate and access Dropbox accounts.

Lenovo confirmed in a statement to Bloomberg that it recently became aware of a "legacy integration" between Lenovo ID and Dropbox that "could be used to improperly authenticate certain Dropbox accounts." The companies worked together to address the security issue. Lenovo said its customers were not affected and an investigation is ongoing.

Dropbox does not expect the breaches to have a material impact on its business, according to Rathschmidt.

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