Analysing the Impact of a DDoS Attack Announcement on Victim Stock Prices

DDoS attacks are increasingly used by 'hackers' and 'hacktivists' for various purposes. A number of on-line tools are available to launch an attack of significant intensity. These attacks lead to a variety of losses at the victim's end. We analyse the impact of Distributed Denial-of-Service (DDoS) attack announcements over a period of 5 years on the stock prices of the victim firms. We propose a method for event studies that does not assume the cumulative abnormal returns to be normally distributed, instead we use the empirical distribution for testing purposes. In most cases we find no significant impact on the stock returns but in cases where a DDoS attack creates an interruption in the services provided to the customer, we find a significant negative impact.

[1]  Jackie Rees Ulmer,et al.  Market Reactions to Information Security Breach Announcements: An Empirical Analysis , 2007, Int. J. Electron. Commer..

[2]  Anna Sperotto,et al.  Characterizing and Mitigating the DDoS-as-a-Service Phenomenon , 2014, AIMS.

[3]  E. Fama,et al.  Common risk factors in the returns on stocks and bonds , 1993 .

[4]  Huseyin Cavusoglu,et al.  The Effect of Internet Security Breach Announcements on Market Value: Capital Market Reactions for Breached Firms and Internet Security Developers , 2004, Int. J. Electron. Commer..

[5]  Ken Peffers,et al.  The Impact of Information Technology Investment Announcements on the Market Value of the Firm , 1993, Inf. Syst. Res..

[6]  Lei Zhou,et al.  The Economic Cost of Publicly Announced Information Security Breaches: Empirical Evidence from the Stock Market , 2003, J. Comput. Secur..

[7]  Tyler Moore,et al.  Measuring the Cost of Cybercrime , 2012, WEIS.

[8]  M. Arcuri,et al.  The effect of information security breaches on stock returns: is the cyber crime a threat to firms? , 2014 .

[9]  Ashish Garg,et al.  Quantifying the financial impact of IT security breaches , 2003, Inf. Manag. Comput. Secur..

[10]  Lei Zhou,et al.  The impact of information security breaches: Has there been a downward shift in costs? , 2011, J. Comput. Secur..

[11]  A. Hovav,et al.  The Impact of Denial‐of‐Service Attack Announcements on the Market Value of Firms , 2003 .

[12]  J. Campbell,et al.  Event Studies in Economics and Finance , 1997 .

[13]  David Hinkley,et al.  Bootstrap Methods: Another Look at the Jackknife , 2008 .

[14]  Molly Sauter.  The Coming Swarm , 2014 .

[15]  Lefteris Angelis,et al.  The impact of information security events to the stock market: A systematic literature review , 2016, Comput. Secur..