Event study Methodology is one of the important tool used to access the impact of Information Technology failure on listed companies. It has been used to access the events such as corporate events – (Dividend, Bonus, Merger and acquisition etc), Failure Events and surprising news on the companies. For example, announcement of sudden system crash during trading hours creates “Lost Out” situation
amongst the investor. Where the money has gone, where the order lost etc questions arises to investor mind and makes investor panic. Event study helps to understand the exact impact of failure on the companies listed on the stock exchange. In turn, investor also gets idea on how this failure impacted on their investment to that company.