CrowdStrike shares set to extend losses as outage effects linger
Posted on July 22, 2024
July 22 (Reuters) – Shares of CrowdStrike (CRWD.O), opens new tab fell 5% in premarket trading on Monday, extending their streak of losses, after several analysts downgraded the stock on concerns over the financial fallout from the global cyber outage last week.
CrowdStrike’s glitchy update to its security software affected computers powered by Microsoft’s Windows operating system, disrupting internet services across the globe and leaving people without access to banking or healthcare services.
Microsoft (MSFT.O), opens new tab said on Saturday that about 8.5 million Windows devices, or less than 1% of all Windows machines, were affected.
Services across industries gradually came back online later on Friday but companies were dealing with backlogs, delays, canceled flights and other issues, raising questions on how to avoid such a situation in the future and whether such critical software should remain in the hands of a few companies.
CrowdStrike will likely face resistance in signing new deals in the near term as a result of the anticipated fallout from the quality assurance issue which caused the massive tech outage, Guggenheim analysts said on Sunday.
“While the outage could remain a near-term overhang, we believe CrowdStrike will emerge as a stronger company as this was not a breach, but rather a significant breakdown in process,” RBC Capital Markets analysts said.
At least six brokerages have cut their price targets on CrowdStrike, with two more downgrading the stock’s rating to “neutral” from “buy”.
The outage triggered an 11% drop in CrowdStrike’s shares on Friday.
Shares of cybersecurity rivals Palo Alto Networks (PANW.O), opens new tab, Sentinel One (S.N), opens new tab and Fortinet (FTNT.O), opens new tab were up between 1% and 3% in premarket trading on Monday.
Read more; https://www.reuters.com/technology/crowdstrike-shares-set-extend-losses-outage-effects-linger-2024-07-22/
