Cybercrime Effects on Stock Prices

Cybercrime is a prevalent and serious threat to publically traded companies. This rapid growing crime is referred to as “the greatest transfer of wealth in human history” or the “rounding error in a fourteen trillion-dollar economy.” Cybercrime costs companies billions of dollars through stolen assets or lost business and creates a permanent blemish to the companies’ reputation. After the announcement of cybercrime in a company, customers begin to worry about the security of their financial transactions. Known history or an announcement of cybercrime within the company can ultimately lead to lower stock prices or lost business. Lowered stock prices and lost business become legitimate concerns of financial analysists, investors, and creditors. This thesis examines multiple case studies which demonstrates the impact of cybercrime on stock prices, marketing activities and actions, and stockholder value. The case studies will examine the different types of cybercrime and its consequences to the company. Thus, this thesis examines an in depth analysis of how cybercrime or its announcement of weak cyber security affects stock prices in a company, the attitudes toward cybercrime from stockholders, and the need for businesses to increase their security programs to prevent future attacks.