Share Prices Take Hit After A Data Breach

According to an analysis conducted over several years, companies that suffer data breaches are likely to underperform on the stock market. The companies analyzed included Apple, JP Morgan Chase and Yahoo. Share prices hit a post-breach low about two weeks after a breach, with an average drop of about three percent (some studies say five percent). Breaches of highly sensitive information -credit card information. social security numbers – see larger drops in share price than companies that leak less sensitive information. A Harvard Business Review study saw little overall effect on share price, but analysts agree that share prices aside, the immediate problems a breach causes can be catastrophic. The company’s reputation is tarnished, and there is an often a shakeup of the corporate and security structures. Consumers, stakeholders, and the public lose confidence in the company and accountability for the incident falls on the board and c-suite.