Ashley Madison kisses its London Stock Exchange IPO goodbye

IT was the hacking crisis that almost brought cheating website Ashley Madison to its knees. Now the site’s parent company is feeling the financial pinch.

Why Ashley Madison can’t float

IF YOU’RE looking to take your business public, you should first learn how to keep its member’s details private.

That’s the hard lesson for Ashley Madison after stolen data about its adulterous clientele was published online, making a mess of the controversial site’s plans for an Initial Public Offering (IPO).

The cheating website’s parent company, Avid Life Media (ALM), has shelved plans to float on the London Stock Exchange because of the leak and now faces a battle for survival as hacking victims consider legal action against the firm, according to a report published by The Telegraphovernight.

The firm admitted earlier this week hackers had indeed published some legitimate data about its users — a potentially devastating development for a site based on discretion — but refused to discuss the impact on the float.

“When and if we have news with regards to our business (IPO or otherwise), we will make the appropriate statements at that time,” ALM spokesman Paul Keable said.

Still from Ashley Madison website

The Ashley Madison crisis was compounded this morning when it emerged that the hackers behind the initial security breach, known as the Impact Team, had dumped another swathe of files overnight — double the size of the initial dump — including internal data and emails stolen from founder Noel Biderman’s inbox.

It couldn’t have come at a worse time, as ALM had been looking to raise as much as $200 million with an offering aimed at the London Stock Exchange in coming months.

ALM picked London in part because of moral quibbles from US investors that squelched demand — despite its claims of robust growth in online cheating. Those claims were backed up by impressive numbers for Ashley Madison, including a revenue surge last year to $115 million, up 45 per cent from a year ago.

But now, analysts will be hard-pressed to forecast anything but sales declines as ALM — whose other sites include Cougar Life and Established Men — is mired in a crippling conversation over how much private user data was leaked.

“No current or past members’ full credit card numbers were stolen from Avid Life Media,” the company said in a statement.

“Any statements to the contrary are false.”

Several security experts say they’ve unearthed partial credit-card information from Ashley Madison members among the leaked data. But it’s not so much the credit-card info that millions of Ashley Madison members will be worried about, says Marc Boroditsky, operating chief of Authy, a San Francisco-based security firm.

“They got the names and passwords of the users,” Boroditsky said, citing data leaked on the Dark Web late Tuesday, which hasn’t yet widely come to light on more accessible parts of the internet.

“They’ve got the profile — in other words, what those users wanted to do on the service.”

He said Ashley Madison “is screwed” unless it takes swift action to tell members and investors: “This is what broke, this is how it broke, and this is how we’re going to fix it.”

The hackers also claim Ashley Madison has been taking its male clients for dupes, citing a “fake profile” lawsuit — which has been thrown out — that alleges between 90 and 95 per cent of the site’s members are male.

“Chances are your man signed up on the world’s biggest affair site, but never had one,” the hackers said.

news.com.au has contacted ALM for further comment.