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An Analysis of the Impact of WannaCry Cyberattack on Cybersecurity Stock Returns

Daniel Castillo () and Joseph Falzon ()
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Daniel Castillo: Faculty of Economics, Management and Accountancy, University of Malta, MALTA, https://www.um.edu.mt/fema
Joseph Falzon: Faculty of Economics, Management and Accountancy, University of Malta, MALTA, https://www.um.edu.mt/fema

Review of Economics & Finance, 2018, vol. 13, 93-100

Abstract: This research examines the impact of the WannaCry cyberattack, considered to be the defining event for cyber threats, on stock returns of companies operating in the cybersecurity industry on the first trading day after the event. The aim is to ascertain whether the reaction of stock prices on this day could be classified as abnormal and which direction they follow. The expectation is for a demand shift for the products and services offered by these firms and consequently stock markets should reflect this new information in equity prices. Literature has mostly focused on natural catastrophes and lately on man-made catastrophes like terror attacks. This study explores the emerging area of cyberattacks which could develop into catastrophic situations. Event-study methodology is employed for the analysis of this specific event and results clearly indicate that WannaCry had a positive effect on the equity returns of cybersecurity companies and cybersecurity investment vehicles.

Keywords: WannaCry Cyberattack; Ransomware; Stock returns; Event-study; Cybersecurity industry (search for similar items in EconPapers)
JEL-codes: G11 G14 G15 G22 (search for similar items in EconPapers)
Date: 2018
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