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CrowdStrike’s shares fell 9.7% on Tuesday, closing at $233.65, marking the lowest level of the year. This significant drop follows reports that Delta Air Lines may seek damages from the security software company in connection with a recent system outage.
Key Developments:
- Share Price Decline: CrowdStrike shares decreased by $25.16, bringing the company’s value down by one-third since July 19.
- Incident Background: The decline follows a major outage caused by a software update from CrowdStrike, which affected various industries, including airlines. The incident led to the cancellation of nearly 7,000 Delta flights, costing the airline an estimated $350 million to $500 million.
- Legal Action: Delta has reportedly hired prominent attorney David Boies, chairman of Boies Schiller Flexner, to pursue compensation from both CrowdStrike and Microsoft. No formal lawsuit has been filed yet, and Delta has not responded to requests for comment.
Additional Context:
- Regulatory Scrutiny: The U.S. Department of Transportation is investigating Delta due to the extensive flight disruptions and service failures resulting from the outage.
- Attorney Background: David Boies is well-known for his role in the U.S. government’s antitrust case against Microsoft and for his work on high-profile cases, including overturning California’s ban on gay marriage and representing Harvey Weinstein and Theranos founder Elizabeth Holmes.
The potential legal action and ongoing investigation have heightened concerns among investors, contributing to CrowdStrike’s significant stock decline.