Delta Bleeds Money After Tech Disaster, Pursues Legal Claims Against CrowdStrike And Microsoft
Portfolio Pulse from Lekha Gupta
Delta Air Lines (NYSE:DAL) expects a $380 million revenue impact for the September quarter due to an outage caused by CrowdStrike (NASDAQ:CRWD), leading to 7,000 flight cancellations. Delta is pursuing legal claims against CrowdStrike and Microsoft (NASDAQ:MSFT) for damages totaling at least $500 million. The outage also resulted in $170 million in non-fuel expenses and a $50 million reduction in fuel expenses. DAL stock has lost around 12% in the last 12 months. Investors can gain exposure via U.S. Global Jets ETF (NYSE:JETS) and Defiance Hotel, Airline, and Cruise ETF (NYSE:CRUZ).
August 09, 2024 | 10:16 am
News sentiment analysis
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NEGATIVE IMPACT
The Defiance Hotel, Airline, and Cruise ETF, which includes Delta Air Lines, may be impacted by Delta's $380 million revenue hit and legal actions against CrowdStrike and Microsoft.
As Delta is a significant component of the CRUZ ETF, the negative news surrounding Delta's financial impact and legal actions could weigh on the ETF's performance.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
CrowdStrike is being sued by Delta Air Lines for causing an outage that led to 7,000 flight cancellations and a $380 million revenue impact for Delta. Delta is seeking at least $500 million in damages.
The lawsuit and the significant financial impact on Delta are likely to negatively affect CrowdStrike's stock in the short term. Legal battles and potential liabilities could weigh on investor sentiment.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100
NEGATIVE IMPACT
Delta Air Lines expects a $380 million revenue impact for the September quarter due to an outage caused by CrowdStrike, leading to 7,000 flight cancellations. Delta is pursuing legal claims against CrowdStrike and Microsoft for damages totaling at least $500 million.
The significant revenue impact and legal actions indicate a negative short-term outlook for Delta's stock. The operational disruptions and financial losses are likely to weigh on investor sentiment.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100
NEGATIVE IMPACT
The U.S. Global Jets ETF, which includes Delta Air Lines, may be impacted by Delta's $380 million revenue hit and legal actions against CrowdStrike and Microsoft.
As Delta is a significant component of the JETS ETF, the negative news surrounding Delta's financial impact and legal actions could weigh on the ETF's performance.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
Microsoft is being sued by Delta Air Lines for damages related to an outage caused by CrowdStrike, which led to 7,000 flight cancellations and a $380 million revenue impact for Delta.
The legal action taken by Delta against Microsoft could negatively impact Microsoft's stock in the short term. The association with the outage and potential liabilities may affect investor sentiment.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100