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Do Data Breaches Affect Stock Performance in the Long Run? (zdnet.com)
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.
"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.
I'm going to say, no.
Just KIDDING!
See subject: Your MASSIVE FAIL in this life is you're nothing more than a chattering little do-nothing "ne'er-do-well" online & you know it...
* Is that the best your "phantasyland FAKE NAME" (for your fake lie of a so-called 'life') can manage?
When a FAKE NAME do nothing fuck like YOU does better than I have? Then talk (you're all talk & no action)...
You can't help you're an immature little BUTTHURT no-mind, lol! I blew you away in TONS OF PLACES and easily dust your no-mind bullshit blatherings.
APK
P.S.=> The TRUE PRICE of your UNIDENTIFIABLE FAKE NAME do-nothing selves like you that I can ALWAYS CASH IN ON (lol) is that I can use FACT/TRUTH on them to SHATTER their all TOO fragile delusional egos that they actually know A DAMN THING in computing, lol... apk
Because there is no accountability (ie. massive fines, etc.)
Do data breaches cause financial under performance? Or do poorly run companies not see the importance of strong defences to prevent data breaches.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
no u r. can't recognize a pause when you read one. u breave wif ur mouf don't u? poor trumpster. no attention span. lost u at the first comma. lulz!
It's almost like all the short events make up the long term. Surprising!
The only things that affect stock price today are the Fed keeping interest rates artificially low, rent seeking, and corporate tax cuts. When the reckoning comes, it's going to be spectacular. I predict that within a year we'll be bailing out corporations and banks like never before. The deficit goes up, bond prices are straining their harnesses, and workforce participation continues to drop under Trump.
Companies don't have to do a good job any more.
You are welcome on my lawn.
c6gunner your FAKEname's on a post impersonating me & worse is you altering /. user's words https://linux.slashdot.org/com... as I challenged you to show you do better work and you can't after you tried to mock me you hypocrite LYING loser https://linux.slashdot.org/com... .
* You're online FAKENAME trash c6gunner & a childish dishonest punk.
APK
P.S.=> Impossible to deny FACT of your FAKEname (for your FAKE wasted lie of a so-called life) on that 1st post link above you unbelievable pussy loser... apk
Human memory is too short lived for it to be a long term issue.
Catastrophe today, forgotten soon after once something else gets their attention.
c6gunner your FAKEname's on a post impersonating me & worse is you altering /. user's words https://linux.slashdot.org/com... as I challenged you to show you do better work and you can't after you tried to mock me you hypocrite LYING loser https://linux.slashdot.org/com... .
* You're online FAKENAME trash c6gunner & a childish dishonest punk.
(PUTTING WORDS IN MY MOUTH TOO saying what I don't (on spectre/meltdown) https://tech.slashdot.org/comm... - bank on 1 thing fucker - THIS exposing YOUR DIRTY BULLSHIT is NOT going to stop...)
APK
P.S.=> Impossible to deny FACT of your FAKEname (for your FAKE wasted lie of a so-called life) on that 1st post link above you unbelievable pussy loser... apk
Most of the time, that means a huge fine and criminal proceedings...but the government will never bite the hand that feeds it, plus OPM got pwn3d a few years ago, and the DMVs of various states routinely sell their databases to private companies.
And if that else fails, time for a taxpayer-funded bailout!
As much as I'd like to believe there is justice for lack of security concern, the problem with the conclusion of the study is that the market itself is underperforming FAANG. If you subtract FAANG from the S&P, the S&P is actually down for the year. That suggests most stocks are on average down.
The bright spot is AMD vs INTC, after Spectre (and Intel's back door Intel ME), became a public vulnerability, AMD has been the best performing stock in the S&P YTD.
I would tend to read the causation the other way. Companies that are underperforming will tend not to invest in security, which will inevitably cause them to suffer a data breach.
With the fact that insider trading isn't prosecuted, the fact that CxO types can short their stock, announce the security issue, make windfalls, and laugh all to the bank, makes security issues worse.
I used to work in DevOps. If code causes a security issue that causes massive lawsuits, the dev is insulated from that, between layers of departments and legal. If the developer fails to make deliverables, it gets mentioned every day at the stand-up meeting and the SCRUM master might just tell their boss that he recommends a pink slip.
This is why my former co-worker's SQL server code runs as user SYSTEM, and their UNIX code runs as root. Developers just don't have time to worry about security.
Of course, there is the adage from C-levels that Security has no ROI, and the only person who profits from a lock are lock makers.
Data braches and its consequences are wrong for various reasons. People having their data exposed because of a negligent or incompetent company is wrong. Regardless of stock price.
I am tired of the "American" mindset that the effect of "things" are ultimately measured by the performance of the economy. Economy doing ok? Well, then nothing bad has really happened. Sony was hacked in a huge scandal in 2018, but one year later noone cares and four years later nobody remembers? Then it does not matter, and it is as if it never happened - who cares. Elect a p... grabbing dictator loving president and the economy somehow keeps improving? Guess that wasn't so bad then.
The sooner America (and other hardcore capitalists around the world) learn to stop using money as the ultimate measure of good or bad, and start optimizing for things that matter (such as quality of life), is the moment your country(ies) will be able to start improving.
HBGary is an example. I'm unsure if they were listed but it definitely trashed their business badly.