Data breaches affect share prices
Share-price is at the command of the markets, who interrogate corporate decision making like strategy, operational performance, financial statements, business decisions and external factors such as regulations and PEST. It should be of no surprise that a cyber-attack influences share price. Cyber strategy is influenced by business strategy, business operations and decision making impacts security posture, changes in local and global regulation and standards (E.G. GDPR or US DoD – CMMC) has a profound impact on security posture, and costs.
The impact of a hack is not just a short-term blip in price. Cyber has a longer-term impact on organisational performance. Cyber remediation costs, legal and regulatory fines and brand and reputation impacts take time to work through. Equifax was one of the first companies to be downgraded by Moody’s in 2019 due to the longer-term impact on free cash flow, following its 2017 hack. It’s $3.4bn of debt was downgraded last week due to the compounding impact of cyber spend and economic challenges on free cash flow, albeit still at a moderate level of risk.(https://lnkd.in/dcsD8T7).
Cyber has a habit of coming back to haunt you. To put in place the necessary security practices, to secure Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). In my view it is a regulation with which has some similarities to GDPR and CCPA. In the case of CMMC, formally underpinned by NIST 800 – 171.