CrowdStrike Shares Plunge Amid Delta Compensation Report
Shares in CrowdStrike take another hit after report suggests Delta Air Lines will seek compensation for recent global IT outage
Texas-based cybersecurity firm Crowdstrike may soon face what could be the first legal action for its role in the world’s largest ever IT outage.
CNBC reported this week that Delta Air Lines, the oldest operating US airline, has hired prominent attorney David Boies to pursue potential damages from CrowdStrike and Microsoft after the mass outage on Friday 19 July 2024. That report did state that so far no lawsuit had been filed.
CrowdStrike’s CEO George Kurtz had apologised when it became clear that a faulty content configuration update for CrowdStrike’s Falcon sensor tool had plunged an estimated 8.5 million Windows computers into a ‘Bue Screen Of Death’ reboot loop.
Compensation bid?
The disruptions impacted thousands of flights, hospital appointments and business operations around the world.
Delta is reportedly handling over 176,000 refund or reimbursement requests after almost 7,000 flights were cancelled.
The outages reportedly cost the airline an estimated $350 million to $500 million.
Nearly a week after the faulty update, CEO George Kurtz revealed that “over 97 percent of Windows sensors are back online as of 25 July.”
But the repercussions and fallout from the outage continue.
Share price
CrowdStrike’s share price had tanked nearly 15 percent on the day of the outage – Friday 19 July – to $293.21.
But after the CNBC report this week that Delta Air Lines has hired a prominent attorney and is to seek compensation, shares in CrowdShire fell another 9.7 percent to $235.68 on Tuesday.
CrowdStrike’s stock, which had more than doubled in 2023, has fallen over 24 percent since the outage, leading to a loss of over $20 billion in market valuation.
The Department of Transportation said last week that it is investigating Delta due to the widespread flight disruptions and service failures.
Attorney David Boies is reportedly best known for representing the US government in its landmark antitrust case against Microsoft, and for helping win a decision that overturned California’s ban on gay marriage.
He also worked with imprisoned Hollywood mogul Harvey Weinstein and imprisoned Theranos founder Elizabeth Holmes.
