CrowdStrike hit by class action lawsuit from shareholders over outage

CrowdStrike is facing a class action lawsuit from shareholders who allege that the cybersecurity firm misled them regarding its software testing practices, which they claim contributed to a significant global outage on July 19, 2024. This outage affected over eight million computers and disrupted services across various sectors, including airlines, banks, and hospitals. The lawsuit, filed in federal court in Austin, Texas, asserts that CrowdStrike's assurances about its technology were false and misleading, leading to a 32% drop in the company's share price, resulting in a loss of approximately $25 billion in market value. The complaint references statements made by CEO George Kurtz during a March conference call, where he described the software as "validated, tested and certified." Following the outage, Kurtz was called to testify before Congress, and Delta Air Lines, which reported a $500 million loss due to the incident, has sought legal action against CrowdStrike. The lawsuit, led by the Plymouth County Retirement Association, seeks unspecified damages for shareholders of CrowdStrike Class A shares from November 29, 2023, to July 29, 2024. CrowdStrike has stated that it believes the lawsuit lacks merit and plans to defend itself vigorously. The company's shares closed at $231.96 on the day of the report, down from $343.05 prior to the outage.