Data Breaches Impact on Company's Financial Stability

This research focuses on finding and estimating the impact done by data breaches announcements made by public companies on price of their stocks at the stock market. Analysis of other works done on this topic showed that the most efficient methodology for this research is event study. Using event-study methodology we found out optimal parameters for this research and gathered data. We identified 38 events over 2012-2017 period. We used Fama-French model for calculation of Abnormal Return and t-test statistics to prove our hypothesis. Our results indicate that there is a statistically significant negative impact on stock price resulting from announcements of data breaches. Measured negative impact is 1.76% over the 4-day event window, including the announcement day. Additionally, we calculated the difference in impact in caused by announcements in different industries and compared our results to previous studies.