Delta CEO Reports $500M Loss from CrowdStrike IT Outage, Shareholders File Lawsuit

CrowdStrike is facing a lawsuit from its shareholders following a significant IT outage caused by a faulty software update, which led to the crash of millions of devices worldwide.

Filed in Austin, Texas, the lawsuit accuses CrowdStrike of providing “false and misleading” statements about its software testing procedures. The shareholders claim that the company's stock price plummeted by 32% within 12 days of the incident, resulting in a market value loss of $25 billion. The plaintiffs, who held stock between November 29 and July 29, are seeking unspecified compensation, alleging that executives misled investors by assuring them that the software updates were thoroughly tested. On March 5, CEO George Kurtz had asserted that the software was “validated, tested, and certified.”

A representative from CrowdStrike told the BBC: “We believe this case lacks merit and we will vigorously defend the company.”

The problem originated from a bug in the system intended to ensure the correct functioning of software updates, which allowed “problematic content data” to go undetected. On its ongoing incident report page, CrowdStrike announced that nearly all affected devices had been restored: “Using a week-over-week comparison, ~99% of Windows sensors are online as of July 29 at 5pm PT, compared to before the content update. We typically see a variance of ~1% week-over-week in sensor connections.”

Delta Airlines was severely impacted by the disruption, incurring approximately $500 million in lost revenue and passenger compensation. The airline had to cancel over 5,000 flights and manually reset 40,000 servers. Delta CEO Ed Bastian has stated that the airline will seek damages from CrowdStrike, declaring: “We have no choice.” Reports indicate that Delta has enlisted the help of renowned lawyer David Boies to pursue compensation from both CrowdStrike and Microsoft.