The stock falls. It stays down for a period of months. Then it comes roaring back to new highs.
Will it happen to Target (TGT)? It should, but recent events might give pause.
For one thing, Target admitted just after Christmas that it lost PIN numbers, not just card numbers and names. These are the four (or more) numbers you use with a debit card to withdraw cash or authorize payments.
Target emphasizes that the PINs it lost were encrypted, that they weren't stored on its computers, but the fact is, this is a materially more-serious breach than those that came before.
For other industry players, who may have thought the worst of the baddies were rounded up last year, this is disquieting. Unless recent arrests on Spain lead to the people who got Target, it means the perps here are still at large, and the loss of PINs indicates they're capable of far greater mischief than their predecessors.
Worse, the loss of PIN numbers could indicate the possibility that someone inside Target's card processing shop may be involved here. That turned out not to be the case in past instances.