Crowdstrike
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The company’s shares fell sharply again on Monday as investors continued to consider how Friday’s tech turmoil would affect the cybersecurity company.
Major PC outages occurred Friday at airlines, hospitals, businesses and banks that use Windows and CrowdStrike security software. The companies experienced disruptions to operations when computers crashed due to a buggy update that CrowdStrike sent to Windows customers on Thursday night.
CrowdStrike shares fell another 11.9% to $268.62 in trading on Monday after dropping 11% on Friday.
CrowdStrike said the issue wasn’t the result of a hack or other security issue, but accepted responsibility. “We understand the seriousness of the situation and deeply apologize for any inconvenience or trouble caused,” a company spokesperson said in a statement. Barons on friday.
In a blog post over the weekend, Microsoft said the CrowdStrike incident affected 8.5 million Windows devices, or less than 1% of all Windows machines. “While a small percentage, the widespread economic and societal impact reflects CrowdStrike’s use by companies that run many essential services,” the company said.
About 29,000 customers pay CrowdStrike to monitor cybersecurity threats, protect their computers from malware, and provide computer security device management.
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Airline stocks were also slow to gain on Monday in the wake of the suspensions. Delta Air Lines said it was canceling 500 more flights just hours after Transportation Secretary Pete Buttigieg said the airline had received complaints over the weekend. Delta shares fell 1.7% to $44.69.
CrowdStrike’s stock price’s continued weakness wasn’t a big surprise to Wall Street, where Wedbush analyst Dan Ives said the bug had given the company “publicity, but not in a good way.”
Guggenheim similarly downgraded the company’s shares to “neutral” from “buy” on Sunday. Analyst John DiFucci wrote that the cybersecurity company could face challenges in signing new business. “Reputational recovery may take longer, which will likely impact new business awards, at least in the near term,” he wrote.
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CrowdStrike shares had risen 34% this year before Friday’s outage, but are on track to have their worst day since Nov. 30, 2002. The stock also was the worst-performing index in the S&P 500 and Nasdaq 100 on Monday.
Please contact George Glover at george.glover@dowjones.com and Tae Kim at tae.kim@barrons.com.
