Source: Wall Street See
Due to a global IT system crash caused by CrowdStrike software updates, Delta Air Lines has canceled more than 5,000 flights from last Friday to this Monday. Analysts at Guggenheim, who downgraded CrowdStrike from buy to neutral, believe that it will take some time for the company to repair its image, which could affect its signing of new contracts.
After the global IT system crash last week, the cybersecurity company's stock price continued to plummet.$CrowdStrike (CRWD.US)$Previously mentioned by the Wall Street Journal, the issue with the CrowdStrike software update caused the Windows system to crash last Friday, resulting in what was deemed the largest global IT system crash in history. Multiple banks, funds, asset management companies, and exchanges were involved, impacting the global supply chain. Industry experts believe that air transportation may take multiple weeks to recover. Microsoft estimated on Saturday that the CrowdStrike incident has affected 8.5 million Windows devices, which is less than 1% of the total global device count. Experts from the British Computer Society indicated that the damage caused by this incident may take several days or even weeks to repair.
On Monday, July 22, Eastern Time, CrowdStrike opened at a low of 6.5%, and the decline expanded to more than 10% in about half an hour after opening. At noon, it refreshed its daily low to $261.59 and fell more than 14% during the day, maintaining a decline of more than 10%. It is likely to experience a second consecutive trading day of decline exceeding 10% after last Friday, which may set a new record low since November 2022 and set a new record low since January 8th, and close at a low level.
The Wall Street Journal previously mentioned that the problem with CrowdStrike software update caused the global IT system crash last Friday, which led to the involvement of many banks, funds, asset management companies, exchanges, and impacted the global supply chain. Industry experts said air transportation may take weeks to recover. Microsoft estimated on last Saturday that the CrowdStrike incident had affected 8.5 million Windows devices, less than 1% of the global device total. Experts from the British Computer Society said that the damage caused by this incident may take several days or even weeks to repair.$Microsoft (MSFT.US)$Air transport is still highly disrupted. CEO Ed Bastian of Delta Air Lines apologized on Monday for the thousands of flight cancellations. According to aviation data company OAG, due to the IT system crash, Delta Air Lines canceled more than 4,600 flights from last Friday to Sunday, which is higher than other airlines. Flight tracking website FlightAware showed that Delta Air Lines canceled more than 700 flights on Monday morning, accounting for 19% of its mainline flight operations and more than half of the total number of canceled flights in the United States.
CrowdStrike's official explanation is that the massive system crash this time originated from the failure of its Falcon sensor software update. CrowdStrike CEO George Kurtz mentioned to the media last Friday that IT personnel quickly worked to repair the computer. At the same time, some hackers tried to create malicious websites that seemed to provide software updates during this chaos.
It seems that the aftershocks of CrowdStrike's incident on the global technology system are not over yet. Until last Sunday, some netizens posted on social media and showed pictures of terminal 5 of London Heathrow Airport, showing a so-called "dead blue screen" of the system. On that day, CrowdStrike said the company is testing a faster way to repair affected machines.
Aviation transportation is still greatly disturbed.$Delta Air Lines (DAL.US)$Delta Air Lines CEO Ed Bastian apologized on Monday for the thousands of flight cancellations. According to aviation data company OAG, due to the IT system crash, Delta Air Lines has cancelled over 4600 flights from Friday to Sunday, more than any other airlines. Flight tracking website FlightAware showed that Delta Air Lines cancelled over 700 flights on Monday morning, accounting for 19% of its mainline flight operations and more than half of the total cancelled flights in the US.
Wall Street institutions have begun to issue warnings on this stock. Guggenheim Securities' analysts lowered the stock's rating from buy to neutral last Sunday. These analysts, led by John DiFucci, said the stock is still trading at the highest multiple of recurring revenue within our entire software coverage, and it may take some time for CrowdStrike to repair its image, and the consequences may affect its contracts.
These analysts wrote in their report:
"We still have great respect for CrowdStrike's leadership team and believe that the company will eventually become stronger because of this incident. If investors look at the prospects for the next few years, they can get through this difficult period. But now it is difficult for us to tell investors to buy CRWD (Note: CrowdStrike's stock code)."
The report released by Goldman Sachs this Monday maintained a buy rating for CrowdStrike's stock. However, the bank's analysts said they expect that between the system crash and the end of the company's second quarter on July 31, CrowdStrike's trading will take longer to complete.
Goldman Sachs' report stated:"Our recent conversations have confirmed our view that there may be a small change in terminal market share after the incident." We realize that more details in hindsight analysis will further confirm this view."
Editor / jayden