New York: Shares of CrowdStrike fell over 4% in premarket trading on Tuesday following reports that Delta Air Lines plans to seek compensation from the cybersecurity firm for a recent global IT outage that severely impacted various industries, including airlines.
The IT outage, which occurred on July 19, resulted in more than 2,200 flight cancellations. Since the incident, Delta has canceled over 6,000 flights. The problem was linked to CrowdStrike’s “Falcon Sensor” software, which caused Microsoft Windows systems to crash, leading to the infamous “Blue Screen of Death”.
In response, Delta has engaged a law firm and is also seeking compensation from Microsoft, according to CNBC.
CrowdStrike’s stock, which had more than doubled in 2023, has dropped over 24% since the outage, erasing more than $20 billion in market value. Many clients are now reconsidering their spending on CrowdStrike and are anticipating pricing concessions, as indicated by a survey from Evercore ISI.
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“Nearly everyone agreed that they expect some form of monetary relief, such as discounts, service revenue credits, or free products,” noted Evercore ISI, adding that CrowdStrike is already in discussions with its customers regarding these issues.
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Needham analysts have warned that the damages from the outage could lead to reduced customer confidence in relying heavily on single platforms due to concentration risks. Feedback from clients has depicted the outage as a “total nightmare” that disrupted business during one of the busiest periods of the year.
