CrowdStrike Stock Continues To Slide: What's Going On?
Portfolio Pulse from Adam Eckert
CrowdStrike Holdings Inc (NASDAQ:CRWD) shares are trading lower following reports that Delta Air Lines Inc (NYSE:DAL) will seek compensation for a recent IT outage. Delta has hired attorney David Boies to seek damages from CrowdStrike and Microsoft Corp (NASDAQ:MSFT). The outage, which was not a security incident, caused significant financial losses for Delta and other companies. Despite the negative news, Needham analyst Alex Henderson maintained a Buy rating on CrowdStrike but lowered the price target from $425 to $375.
July 30, 2024 | 1:12 pm
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POSITIVE IMPACT
Delta Air Lines is seeking compensation from CrowdStrike and Microsoft for a recent IT outage that caused significant financial losses. The company has hired attorney David Boies to handle the case. The outage reportedly cost Delta an estimated $350 million to $500 million.
Delta's proactive steps to seek compensation for the IT outage could potentially recover some of the financial losses, which may positively impact the stock. The involvement of a high-profile attorney indicates the seriousness of the claim.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Microsoft is also being sought for compensation by Delta Air Lines for the recent IT outage. The financial impact on Microsoft is less clear, but the association with the outage could have reputational implications.
While Microsoft is involved in the compensation claims, the direct financial impact is less clear compared to CrowdStrike. The news may have some reputational impact but is unlikely to significantly affect Microsoft's stock price in the short term.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
CrowdStrike shares are trading lower after Delta Air Lines announced plans to seek compensation for a recent IT outage. The outage, which was not a security incident, caused significant financial losses. Despite this, Needham analyst Alex Henderson maintained a Buy rating but lowered the price target from $425 to $375.
The news of Delta seeking compensation for the IT outage directly impacts CrowdStrike's stock negatively. The company's responsibility for the outage and the potential financial implications are significant. The analyst's maintained Buy rating provides some support but lowering the price target indicates caution.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100