Here is a puzzle for you. Why did shares in Yahoo! slide by nearly 10% in the days before Heartbleed was announced and then recover after the main news items broke?
It has long been the case that security vulnerabilities can have a negative effect on the public’s perception of tech companies and the value of their stock. All chief executives need to understand this and take action to reduce the exposure and associated risks.
It happened with Sony three years ago, for example, with an outage on their PlayStation network. This lasted more than a week, resulting in a share price drop of 8%. It affected both consumers and developers, causing major embarrassment for the company.
I have analysed how the recent Heartbleed bug affected certain major tech companies. Yahoo! was widely reported to have been hit hard by Heartbleed and to have leaked user information. Amazon had more to lose than most major companies from a dip in consumer confidence related to electronic commerce. Also included in the analysis were HP, Dell, Google, AOL and Microsoft.
The chart below shows the stock price of these companies over the time of the Heartbleed vulnerability. You can see there are two dips, which can be explained by three main phases.
Technical discussion: [here]
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