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September 15, 2018 05:34 pm

Do Data Breaches Affect Stock Performance in the Long Run?

Trailrunner7 tipped us off to this story on ZDNet:A multi-year study on the stock price evolution for breached companies reveals that data breaches have a long-term impact on a company's stock price, even if it's somewhat minimal. The study, carried out by the research team behind the CompariTech web portal, looked only at companies listed on the New York Stock Exchange that suffered and publicly disclosed breaches of one million records and over in the past three years. In total, the list included 28 companies, such as Apple, Adobe, Anthem, Community Health Systems, Dun & Bradstreet, eBay, Equifax, Experian, Global Payments, Home Depot, Health Net, Heartland Payment Systems, JP Morgan Chase, LinkedIn, Monster, T-Mobile, Sony, Staples, Target, TJ Maxx, Under Armour, Vodafone, and Yahoo. "In the long term, breached companies underperformed the market," the CompariTech team concluded in their report. "After 1 year, Share price grew 8.53% on average, but underperformed the NASDAQ by -3.7%. After 2 years, average share price rose 17.78%, but underperformed the NASDAQ by -11.35%. And after three years, average share price is up by 28.71% but down against the NASDAQ by -15.58%." Study authors noted that the impact of data breaches likely diminished over time, but the damage was still visible in the stock's NASDAQ performance indicator even after three years, in some cases. Although other factors also weighed into how a stock performed, the fact that all of the analyzed breached companies had a poor performance cannot be ignored. Finance and payment companies suffered the largest drops in their stock prices after a data breach -- with the drops being larger when the breached data included "highly sensitive" info like credit card and social security numbers.

Read more of this story at Slashdot.


Original Link: http://rss.slashdot.org/~r/Slashdot/slashdot/~3/QZzLiPR_uE0/do-data-breaches-affect-stock-performance-in-the-long-run

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