Do Cyberattacks Affect Stock Prices? It Depends on the Breach

Do Cyberattacks Affect Stock Prices? It Depends on the Breach
A security researcher explores how data breaches, ransomware attacks, and other types of cybercrime influence stock prices.

In the aftermath of a data breach, ransomware attack, or vulnerability disclosure, organizations may think about how the news will cause their stock price to dip. New research indicates that although security incidents do affect stock price, the size of this impact largely depends on the circumstances — and rarely lasts.


Alejandro Hernández, senior consultant at IOActive, became curious about the correlation in a previous role when a company with which he was working discovered a "huge" software vulnerability. His colleagues began to speculate how much the stock would dip — some guessed 10%, others said 20%. The business's stock price fell only 3% that day, prompting him to start some new research.


Hernández began to closely examine the organizations that experienced vulnerabilities, security incidents, espionage attacks, or faced criticism for privacy concerns and misinformation. His data includes the company name, sector, type of issue or incident, details of the incident, date of disclosure, change in stock price, and the amount of time it took the stock price to recover.


For many of these incidents, the price drop was minor and recovery time was less than two weeks. But some have a larger impact: The 2017 Equifax breach, for example, kick-started a price drop that hit 31% a week after its disclosure. Many people thought the company would never recover, Hernández says, but its stock was back up within less than two years.


Of similar significance was the more recent SolarWinds campaign, which Hernández classified as an espionag ..

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