Shareholders Sue CrowdStrike After Outage Prompts Stock Price to Plummet

A group of shareholders, led by the Plymouth County Retirement Association, has filed a securities class-action lawsuit against CrowdStrike following a significant outage that caused the company's stock price to drop sharply. The lawsuit claims that CrowdStrike misled investors about the reliability of its Falcon security software, which was implicated in the outage due to a faulty update that affected millions of PCs and servers. Prior to the incident, CrowdStrike's stock was trading between $350 and $390 but fell to $232 per share after the outage. The plaintiffs allege that CrowdStrike falsely represented the efficacy of its technology, stating it was "validated, tested, and certified," while failing to disclose inadequate controls in its software update processes. The lawsuit seeks damages for shareholders who owned CrowdStrike stock between November 29, 2023, and July 29, 2024. CrowdStrike has responded by asserting that the lawsuit lacks merit and that they will defend the company vigorously, noting that they had previously warned investors about risks related to improper deployment and service interruptions. Additionally, Delta Air Lines is reportedly seeking compensation from CrowdStrike due to disruptions caused by the outage, which led to thousands of flight delays and cancellations. CrowdStrike has indicated that it has restored over 99% of the affected systems.