CrowdStrike stock plummets over 40% due to global IT outage and faces lawsuit

From Nasdaq: 2024-08-12 06:00:00

CrowdStrike (NASDAQ: CRWD) is reeling from a massive global IT outage, with its stock plummeting over 40% and facing a lawsuit from frustrated travelers seeking compensatory damages. The total cost of the outage could reach $10 billion, with Delta Air Lines estimating losses of $500 million. Customer relationships are crucial for CrowdStrike’s future.

To recover, CrowdStrike must retain its customer base, as 95% of its revenue comes from subscriptions. Unhappy customers may reduce spending or cancel subscriptions altogether. The company’s reputation has taken a hit, causing uncertainty around its revenue growth and future prospects. Investors should exercise caution before investing in CrowdStrike stock.

The Motley Fool Stock Advisor team did not include CrowdStrike in their list of 10 best stocks to buy now. Prudent investors should monitor CrowdStrike’s performance in the coming quarters before making any investment decisions. The company’s ability to rebound from the crisis and maintain customer relationships will determine its long-term success.



Read more at Nasdaq: Why the Good ‘Ol Days May Not Return for CrowdStrike Stock