Delta (NYSE:DAL) was forced to cancel at least 6,000 flights in the days following the CrowdStrike (NASDAQ:CRWD) outage, which caused the airline to lose money. The airline has hired a top attorney to seek damages from CrowdStrike and Microsoft (NASDAQ:MSFT), whose operating system conveyed the cybersecurity firm’s disastrous update. DAL stock is climbing slightly in early morning trading.
Delta’s Move
The airline has hired attorney David Boies to obtain damages from the tech giants. Among the lawyer’s most famous clients in the past have been the U.S. government in its case against Microsoft, Goldman Sachs (NYSE:GS), former Vice President Al Gore in his case against former President George W. Bush, the New York Yankees, Harvey Weinstein, and Elizabeth Holmes.
According to CNBC, the outage caused by CrowdStrike cost Delta between $350 million and $500 million. The airline has had to process more than 176,000 refund requests in the wake of the outage.
When Reuters asked CrowdStrike about Delta’s moves, CrowdStrike stated that it had “no knowledge of a lawsuit” and would not make any additional comments.
Other Repercussions for CrowdStrike
In the wake of the CrowdStrike outage, many of the cybersecurity firm’s customers are considering slowing or pausing spending on CrowdStrike and “looking for price cuts,” a survey undertaken by investment bank Evercore ISI revealed. The bank added that CrowdStrike is already holding talks about these issues with its clients.
Heading into today, CrowdStrike’s shares had tumbled about 30% since July 12. However, as of yesterday’s market close, they still had a gigantic trailing price-to-earnings ratio of 481 times.
The Price Action of DAL Stock
Heading into today, DAL stock had dropped 5% since July 18, the day before the CrowdStrike outage. In the preceding three months, it had fallen 14%.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
