“Our recent conversations reaffirm our view that there will likely be minimal share shifts in endpoint post this event — although we recognize that additional details in the postmortem will further inform this view,” CrowdStrike faced a major setback as its stock fell 13% during Monday’s trading session following a big software glitch that affected millions of Microsoft Windows devices. On Friday, the company accidentally released a faulty update to its Falcon vulnerability-protection software, causing widespread crashes among PCs, data center servers, and display screens. This disruption hit 8.5 million Windows devices, leading to issues like grounded flights and canceled medical appointments. Meanwhile, hackers exploited the situation by creating fake websites offering fake fixes.
The market reacted strongly, with CrowdStrike’s stock dropping 11% on Friday. Over the weekend, the incident gained more attention as images of the "blue screen of death" spread widely. By Sunday, CrowdStrike said it was working to quickly fix the affected systems. In response, Guggenheim Securities downgraded its rating on CrowdStrike shares from "buy" to "neutral," citing the stock’s high valuation compared to its recurring revenue. They warned that the incident could hurt CrowdStrike’s reputation and impact future contract signings, which are crucial for revenue growth.
On the other hand, Goldman Sachs kept its "buy" rating on CrowdStrike’s stock but expected slower deal closures due to the recent outage. They compared it to a similar incident with McAfee in 2010, noting that such events usually lead to delayed revenue and reduced earnings. While short-term financial impacts are possible, historical trends suggest recovery and growth are still achievable. CrowdStrike’s CEO, George Kurtz, who has dealt with similar problems before, acknowledged the ongoing situation and emphasized the company’s efforts to address the issue and its impact on operations and future business.
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