Role of Cyber-Risk on shaping the movement of stock returns: An event study on T-Mobile Company

Abstract

Cyber risk has become a major concern for companies as the frequency and severity of cyber-attacks have increased. Giving the actual data, the current study aims to investigate the impact of the cyber-risk on T-Mobile company stock returns. T-Mobile company has suffered from six data breaches between the period of 2015 and 2023. The event study was used to test the impact of data breach announcements on T-Mobile Company's stock returns.The findings show that data breaches have a significant impact on companies' financial performance, as indicated by the abnormal returns observed following the announcement of data breaches which were observed in 2015, 2018, and 2021; alternatively, it vanished in 2019, 2020, and 2023.The study may be valuable for practitioners and academics interested in how cyberattacks influence the financial industry. Moreover, results have asignificant implication for businesses, investors, and politicians in terms of enhancing risk management techniques and reducing potential, financial and reputational harm caused by such attacks. However, more research is needed to understand the factors driving the variation in timing and magnitude of abnormal returns following data breach announcements.