Analysing The Impact Of A DDoS Attack Announcement On Victim Stock Prices

TL;DR

This study investigates how announcements of DDoS attacks affect the stock prices of victim companies over five years, finding limited overall impact but significant drops when service interruptions occur.

Contribution

It introduces a novel event study method that uses empirical distributions instead of assuming normality for testing stock return impacts.

Findings

Most DDoS attack announcements do not significantly affect stock prices.

Significant negative impact occurs when attacks cause service interruptions.

The proposed method improves accuracy in event impact analysis.

Abstract

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.