Data Breaches Have Lingering Effect on Stock Prices, Study Says
A data breach can hurt a company's stock price and slow down future growth for years, according to a new study.
July 11, 2017 at 05:00 PM
8 minute read
Data breaches negatively affect a company's ability to do business, public perception of the company and, new research shows, its stock prices. According to a recent study by Comparitech, such cyberattacks can drive a stock's performance down on the day of the announcement, and they can slow future growth of a stock for years. Also the sensitivity of the data leaked—credit card numbers versus email addresses, for instance—directly affects Wall Street's reaction.
For the study, Comparitech, a consumer tech product review and comparison site, examined 24 companies listed on the New York Stock Exchange and other public markets, studying each company's share prices before and after a data breach was publicly announced. The team used the Nasdaq's overall performance as a baseline to compare results. For instance, if the Nasdaq performed poorly overall on a certain day, it could frame a single company's stock drop in a wider context.
The companies studied included Apple Inc., Adobe Systems Inc., eBay Inc., The Home Depot, JPMorgan Chase & Co., LinkedIn Corp., Sony Electronics Inc., Target and Yahoo Inc.
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