CrowdStrike Shares Slide Amid Report Delta Airlines Preparing To Sue

Crowdstrike, a company whose meteoric rise has left many wondering about its origins and involvement in politics, is now under the microscope for the billions of dollars it cost the economy.

This article was originally published by ZeroHedge.

In early premarket trading on Monday, CNBC published a note titled “Jim Cramer calls the bottom in CrowdStrike stock after global IT outage fallout.“ 

By late evening, CNBC’s Phil Lebeau reported that Delta Air Lines hired top attorney David Boies to sue CrowdStrike and Microsoft for damages stemming from the global IT outage that sparked nationwide travel disruptions for days.

This report from Lebeau sent CrowdStrike shares lower in the premarket on Tuesday, down about 4.5% to the $247 handle, below Cramer’s ‘buy—buy—buy’ level.

Here’s more from CNBC:

While no suit has been filed, Delta plans to seek compensation from Microsoft and CrowdStrike, Lebeau reported. Delta hasn’t responded to a request for comment.

The outages cost Delta an estimated $350 million to $500 million. Delta is dealing with over 176,000 refund or reimbursement requests after almost 7,000 flights were canceled.

According to insurer Parametrix, US Fortune 500 companies, excluding Microsoft, are expected to incur $5.4 billion in financial losses due to CrowdStrike’s faulty update, which caused the ‘blue screen of death‘ and paralyzed millions of computers in the US and worldwide.

Parametrix wrote last week that insured losses from IT outages in the US will total around $540 million to $1.08 billion for the Fortune 500 companies.

Parametrix CEO Jonatan Hatzor told Reuters that the outage could be one of “the biggest accumulation event we ever saw in cyber insurance, adding, “This event traveled very fast and was very global.”

Hatzor said financial losses worldwide could total $15 billion, and global insured losses will be as much as $3 billion.

Will Delta initiate the wave of expected lawsuits from companies severely affected by Microsoft and CrowdStrike’s IT outage? If so, this could continue to pressure shares lower.