Cybersecurity software company CrowdStrike saw a 13% drop in its shares on Monday morning following an outage that affected millions of Microsoft Windows devices. The company issued a defective update to its Falcon vulnerability-protection software, causing PCs, computer servers, and display screens to crash. This led to grounded flights and canceled medical appointments, impacting 8.5 million Windows devices globally.
Hackers took advantage of the confusion by setting up malicious websites posing as software updates. CrowdStrike CEO George Kurtz addressed the situation on CNBC, and the company worked to fix affected machines more quickly over the weekend.
Guggenheim Securities downgraded CrowdStrike shares to neutral from buy, citing the high multiple of recurring revenue the stock was trading at. The company's image may take time to repair, impacting contract signings and revenue generation potential.
On the other hand, Goldman Sachs maintained their buy rating on CrowdStrike shares, but expected deals to take longer to close in the aftermath of the outage. Analysts referenced a 2010 McAfee outage that resulted in deferred revenue and negative revenue impact.
Overall, the incident has raised concerns about CrowdStrike's future performance and investor confidence. While some analysts believe the company will become stronger as a result, others caution against immediate investment in the stock. The long-term effects of the outage on CrowdStrike's business and reputation remain to be seen.