Shares of cybersecurity firm CrowdStrike (CRWD.O) fell more than 4% in premarket trading on Tuesday following a report that Delta Air Lines (DAL.N) plans to seek compensation from the company over a recent global IT outage that disrupted various industries, including airlines.
The outage, which occurred on July 19, resulted in over 2,200 flight cancellations that day, with Delta canceling more than 6,000 flights since the incident. The problem was traced back to CrowdStrike’s “Falcon Sensor” software, which caused Microsoft Windows to crash and display the “Blue Screen of Death.”
Delta has now hired a law firm and will also seek compensation from Microsoft (MSFT.O), according to a CNBC report on Monday.
CrowdStrike’s stock, which had more than doubled in 2023, has declined over 24% since the outage, resulting in a market valuation loss exceeding $20 billion. Many clients are reconsidering their spending on CrowdStrike and are expecting pricing concessions. Evercore ISI’s survey noted, “Nearly everyone agreed that they expect some form of monetary relief, such as discounts, service revenue credits, or free products.”
“Feedback from clients suggests that CrowdStrike was already discussing this with its customers,” Evercore ISI added in a note on Tuesday.
Needham analysts commented that damages from the outage would lead to “hindered customer willingness to rely heavily on singular platforms, as that choice introduces concentration risk.” Customers reportedly described the outage as a “total nightmare,” disrupting business during one of the busiest travel and shopping periods of the year.
