Harley-Davidson under pressure due to dealer data leak and share price loss

Brief classification of the contribution: Harley-Davidson itself is not directly affected by a cyber attack, but a data leak at a US dealer caused confusion. Furthermore, a report by Morgan Stanley merely highlights hypothetical takeover possibilities without suggesting any concrete plans or talks. The brand remains independent, even though it was mentioned in a report on potential target companies.

Harley-Davidson between dealer data leak and share price loss

Harley-Davidson, the legendary American motorcycle brand, is currently facing considerable challenges. A recent data leak and a falling share price are currently putting the company in the headlines. However, the news is misleading, because it is not Harley-Davidson itself, but the dealer Appleton Harley-Davidson was affected by the data leak, according to my research.

The data leak at the Harley-Davidson dealer Appleton

At the end of December 2024, it became known that the Harley-Davidson dealer had been the victim of a major data leak. The hacker group “888” claims to have stolen sensitive customer data and published it on the darknet. Thousands of customers could have been affected by this incident. 

Particularly explosive: the data is said to have originated from Appleton Harley-Davidson, a renowned dealer of the brand. According to a study conducted by IT security company Kaspersky in 2024, 43 % of all cyberattacks were targeted at small and medium-sized enterprises (SMEs). Such companies often underestimate the risk of being targeted by hacker attacks and invest less in cyber security.

Hackers are also targeting small companies

An investigation of the Allianz insurance also shows that 60 % of affected small businesses have to close within six months of a serious cyberattack. This highlights the importance of preventative measures and rapid response plans for retailers and businesses of all sizes, which in principle can be applied to all other businesses.

They probably didn't expect to be the target of a hacker attack - but hackers also target weak points in partner and dealer networks in order to gain access to larger data pools.

Dangerous backdoors: risks from third-party software

It becomes particularly problematic when companies use third-party software without knowing the full security risks. So-called „backdoors“ are often integrated into such programs - actually intended as access points for maintenance purposes or software updates.

A report by the Ponemon Institute shows that 56 % of companies that use third-party software do not have a complete overview of their security protocols. This makes not only the direct IT infrastructure vulnerable, but also networked devices such as vehicles, which are increasingly controlled digitally. However, this affects the entire industry and especially the automotive industry, it is not a problem specific to motorcycle manufacturers.

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Falling share price

Parallel to the data leak, Harley-Davidson recorded a significant drop in its share price. Following the publication of the quarterly figures in November 2024, net profit fell by around 24 percent to 199 million dollars, leading to a noticeable drop in the share price. 
Current share price data shows that the share reached a new 12-month low of EUR 28.61 on December 20, 2024. Compared to the annual high of EUR 40.42 on March 28, 2024, this represents a decline of almost 29%.

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Causes and effects

The combination of the data leak and the disappointing financial figures could affect customer and investor confidence in the brand. Harley-Davidson is also facing weakening demand, particularly in North America, which has prompted the company to revise its sales forecast for the full year 2024 downwards.

This is certainly due to the Go Woke corporate strategy which made headlines last summer, particularly in the USA. Here in Germany, the scandal only received very brief attention in the mainstream media. According to a Harley-Davidson statement, the issue of „Diversity, Equality and Inclusion (DEI)“ has been over since April 2024.

https://twitter.com/harleydavidson/status/1825564138032234994

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Is Harley-Davidson a takeover candidate for Morgan Stanley?

Excerpt from the New York Post from January 2, 2025.„Most recently, Nissan Motor announced in December that it would scale back its diversity initiatives after „productive discussions“ with Starbuck. Other major Red State employers such as Tractor Supply, John Deere, Harley-Davidson and Walmart scrapped their diversity initiatives last year.“ Link to the entire New York Post Article.

Another interesting article about Morgan Stanley on Barron's

The article examines the possibility that companies, including Harley-Davidson, could become the target of buyers as part of a resurgent wave of mergers and acquisitions (M&A). The most important points are summarized here and explained in the context of Harley-Davidson:

Background: Resurgence of mergers and acquisitions

- Market situation: After a sharp decline in M&A activity in 2022 (due to high interest rates and a weaker economy), 2024 will see a recovery. The global transaction volume is now around 4 trillion dollars (compared to 6 trillion dollars at its peak in 2021).

- Better conditionsThe US Federal Reserve has lowered interest rates, making takeovers more favorable. At the same time, the economy is growing and companies are more optimistic about the future.

Selection of potential takeover candidates

- CriteriaMorgan Stanley identifies companies with smaller market capitalizations that are attractive for takeovers. Such companies are often bought at a premium to the current share price, which can be interesting for investors.

- Harley-Davidson in focusHarley-Davidson is one of the companies listed that could potentially be takeover targets. Its market capitalization is below 7 billion dollars and its share price has risen at times over the past year.

Why Harley-Davidson?

- Traditional brandHarley-Davidson is a globally recognized name, but has faced challenges in recent years such as declining sales figures and an aging target group.

- Attractiveness for buyersAn acquirer could try to modernize the brand, tap into new target groups or create synergies with other business areas.

- No concrete rumors: The article emphasizes that there are currently none concrete takeover rumors. Harley-Davidson is merely mentioned as a potentially attractive candidate in a favorable M&A market.

Link to the entire article on Barron's

Conclusion

Harley-Davidson faces the challenge of regaining the trust of its customers and investors. Current developments highlight the need to react flexibly to market changes in order to secure the future of the brand.

I don't expect any groundbreaking highlights for the 2025 model year, but there are indications that Harley-Davidson is becoming sportier - some leaks suggest this. The ST segment in particular seems to be the focus, as the demand for sporty tourers is there, at least in our market. In the cruiser segment, a Low Rider S with a 117cc output performance engine could surprise us. It will be particularly interesting to see whether new controls or cockpit systems - similar to those of the Sportster S - will be integrated.

On January 23, 2025 at 5:00 p.m., Harley-Davidson will present the new models for the 2025 model year. It remains to be seen whether they will strike a chord with customers and whether the models can be delivered in time for the start of the season.

Text: Harleysite

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