CrowdStrike is facing a lawsuit from its shareholders over its dipping stock price.
CrowdStrike’s stock was trading at historic highs between $390 and $350 per share before the outage.
But soon after it, the stock price has since gone down to $232 per share.
Everyone still freshly remembers the CrowdStrike outage, when a lot of us had to deal with the blue screen of death. It halted various offices, businesses, and even flights. And CrowdStrike had to bear the brunt of it. Its shares and stock prices went down and now it has also been served a lawsuit. CrowdStrike is facing a lawsuit from its shareholders over its dipping stock price. The Plymouth County Retirement Association, a shareholder in the company, filed a securities class-action lawsuit against the cybersecurity firm, seeking damages for significant stock price losses.
Also read: Cybersecurity platform Crowdstrike down worldwide, many users logged out of systems
Before the whole drama happened, CrowdStrike’s stock was trading at historic highs between $390 and $350 per share. But soon after the outage, the stock price has since gone down to $232 per share. As per the retirement association, CrowdStrike misled them stating that its Falcon security software was reliable. But that wasn’t the case.
As per the retirement association, CrowdStrike “repeatedly touted the efficacy of the Falcon platform while assuring investors that CrowdStrike’s technology was ‘validated, tested, and certified.’ The Complaint alleges that these statements were false and misleading.”
The lawsuit blames CrowdStrike for failing to inform the shareholders about the “deficient controls” used to test software updates before deployment. They further added that due to this negligence, the outage happened which has caused both reputational harm and legal risks.
Also read: CrowdStrike update: What is Blue Screen of Death? The issue affecting all Windows machines
As per the lawsuit, CrowdStrike’s stocks went artificially high because of false and misleading statements. The retirement association is taking the lawsuit ahead on behalf of all shareholders who owned CrowdStrike stock between Nov. 29, 2023, and July 29, 2024. As per the complaint, as of May 30, 2024, approximately 231 million shares of CrowdStrike Class A common stock were outstanding and owned by thousands of investors.
CrowdStrike responded by telling PCMag: “We believe this case lacks merit and we will vigorously defend the company.” The company said that it had informed investors about the risks of “improper deployment or configuration” of its solutions and potential service interruptions.
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Mustafa Khan
Mustafa is new on the block and is a tech geek who is currently working with Digit as a News Writer. He tests the new gadgets that come on board and writes for the news desk. He has found his way with words and you can count on him when in need of tech advice. No judgement. He is based out of Delhi, he’s your person for good photos, good food recommendations, and to know about anything GenZ. View Full Profile
