How Much is Your Share Value? It Just Went Down if You Had a Cyberattack
If you have publicly traded stock and have had a cybersecurity breach, the price of your shares has dropped – permanently. Did you know that?
For the report ‘The Cyber Value-Connection’, CGI worked with Oxford Economics to create a model that is claimed to have captured the damage done to share prices by a cyberattack. According to the report, share prices fall by an average of 1.8 percent on a permanent basis following a severe breach. The report also stated that, “In some extreme cases, breaches have wiped as much as 15 percent off affected companies’ valuations.”
The damage to shareholder value is significant today, but ‘The Cyber-Value Connection’ analysis suggests severe cyber breaches will become even more costly in the future, as industry analysts include cybersecurity as a factor affecting valuation, and new regulation demands that companies disclose incidents.
A similar report published in Information Age stated, “Breached companies tend to underperform the NASDAQ. They recover to the index’s performance level after 38 days on average, but after three years the NASDAQ ultimately outperforms them by a margin of over 40%. Compared to the NASDAQ, the sample of stocks performed poorly on average. Strangely, larger breaches had less of an impact on share price than smaller breaches.”
More food for thought when protecting an organization against cybersecurity attacks. Would this make a difference in your organization?
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