CrowdStrike has fallen more than 10% for several consecutive days! The global IT downtime aftershocks continue, and the stock has been downgraded

After causing a global IT system crash last week, the stock price of cybersecurity company CrowdStrike continued to plummet.

On Monday, July 22nd, Eastern Time, CrowdStrike opened 6.5% lower, with the decline expanding to over 10% within half an hour of trading. At midday, it hit a daily low of $261.59, dropping over 14% intraday. It maintained a decline of over 10%, poised to close down over 10% for the second consecutive trading day since last Friday. This may set a new record for the largest drop since November 2022 and hit a new closing low since January 8th.

Wall Street News previously mentioned that issues with CrowdStrike's software update led to the Microsoft Windows system crash last Friday, causing what is being called the largest global IT system crash in history. Multiple banks, funds, asset managers, and exchanges were affected, impacting the global supply chain. Industry experts suggest that air transport may take weeks to recover. Microsoft estimated last Saturday that the incident involving CrowdStrike has affected 8.5 million Windows devices, accounting for less than 1% of the global device total. Experts from the British Computer Society stated that the damage caused by this incident may take days or even weeks to repair.

CrowdStrike's official explanation is that the massive system crash originated from a failed update of its Falcon sensor software. CrowdStrike's CEO George Kurtz mentioned to the media last Friday that IT staff quickly began repairing computers. Meanwhile, some hackers attempted to take advantage of the chaos by setting up malicious websites that appeared to offer software updates.

It appears that the aftershocks of CrowdStrike on the global tech system are not yet over. Until last Sunday, netizens were still posting on social media, sharing pictures of a "blue screen of death" at Terminal 5 of London Heathrow Airport. On that day, CrowdStrike stated that the company was testing a faster method to repair affected machines.

Air transportation continues to be heavily disrupted. Delta Air Lines CEO Ed Bastian apologized on Monday for the cancellation of thousands of flights by the airline. According to aviation data company OAG, due to the IT system crash, Delta Air Lines canceled over 4600 flights from last Friday to Sunday, surpassing other airlines Flight tracking website FlightAware shows that on Monday morning, Delta Air Lines canceled another 700 flights, accounting for 19% of its mainline flight operations and more than half of the total canceled flights in the United States.

Wall Street institutions have begun issuing warnings about CrowdStrike. Analysts at Guggenheim Securities downgraded the stock from Buy to Neutral last Sunday. Led by John DiFucci, these analysts stated that the stock is still trading at "the highest multiple of recurring revenue within our entire software coverage," and CrowdStrike may need some time to repair its image, with potential consequences affecting signings.

These analysts wrote in their report:

"We still have great respect for CrowdStrike's leadership team and believe that the company will emerge stronger from this incident. Investors can weather the storm if they look at the long-term prospects. But at the moment, it's hard for us to tell investors to buy CRWD (Note: CrowdStrike's stock symbol)."

Goldman Sachs' report released on Monday maintained a Buy rating on CrowdStrike stock. However, analysts at the investment bank expect that trading for CrowdStrike will take longer to complete between the system outage and the end of the company's second quarter on July 31.

Goldman's report stated, "Our recent conversations have reaffirmed our view that there may be very small changes in endpoint share after this incident - and we recognize that more details in post-analysis will further confirm this view."