Cyber breaches have cost shareholders billions since 2013

Companies that experience a severe cyber breach see their share value fall by, on average, 1.8% on a permanent basis. What’s worse, the analysis undertaken for the  report ‘The Cyber-Value Connection’ suggests the negative impact on share value is getting more severe, year-on-year. A company’s share price tells you a lot about the company and its prospects: It is the sum of the market’s expectations for a company. Here is a look:

The share price rises when the market has a positive view on the company’s future profitability and falls when that assessment turns negative. 

KEY POINTS

-For a typical FTSE 100 firm the impact of 1.8% equates to a permanent loss of market capitalisation of £120 million

-In 65 companies, that were analysed in the study, the cost to shareholders  of these companies would be in excess of £42 billion

-In firms that experience a catastrophic cyber breach, where a very large amount of sensitive information is lost, the impact value can be even more dramatic

The value impact varies across sectors'

Financial services experience the greatest burden in terms of impact, reflecting the high levels of regulation, the importance of customer confidence in these organisations and the potential for financial fraud to be a facet of the breach.