Saw a lot of bearish posts but no positions to back it up. I don't see the company recovering from this kind of blunder. Sure people make mistakes but this kind of blunder is not one that a cyber security company can recover from. Cyber security relies on reputation and trust. CRWD had that as a big advantage in the beginning; now that trust is gone. The irony of paying a cyber security company to protect you only to have them destroy your business far worse than an actual virus/hack attack would is insane. Hospitals were literally not operational; doctors and nurses couldn't check patient data on charts and had to cancel live saving surgeries, airports were all closed down costing airlines billions, hell you couldn't even call 911 for emergency services because that was down as well.
Looking at the fundamentals and financials of this company it does not have anywhere near enough in it's cash reserve to cover all the incoming class action lawsuits that will be headed it's way. I see some people saying comments like insurance will cover it all. Insurance does not cover gross negligence. This was supposed to be a top of the line cyber security company that I was initially bullish about before this blunder. Where was the quality assurance? Why was their update not tested to make sure it worked properly first before sending it out to billions of devices world wide? This company is going to get absolutely buried.
Posted by Pianist217
38 Comments
Blood and sweat in that position, brother I respect it.
Would you consider buying calls on CRWD’s publicly traded competitors?
Fk it, I am in!!! My friend’s dad had a ER visit to the hospital yesterday and because of the outage, he literally waited 12 hours for a doctor. Thank god it wasn’t life threatening but I can’t imagine the number of people who lost their lives because of this. My condolences 😔.
Their insurance premiums are going to moon, affecting profits
Their contracts, assuming they don’t fight the clause, says they have to refund 1 year of premiums.
Long term they might be ok, but in the short-term, sales/profits are going to take a dump, but it might not be evident until their future guidance on next earnings calls. So, I bought puts for after the call.
Homie got ~30 karma after 4 years lookin’ mighty sus.
Have worked in corporate IT and 100% agree. Cannot imagine anyone at any level of a corporation suggesting the purchase of any product from Crowdstrike. However Crowdstrike may end up being purchased/taken over by another IT corporation with a good reputation.
If lawsuits arise, Crowdstrike will probably have an excellent legal team to defend against any allegations of “gross negligence”.
‘Gross negligence is a heightened degree of negligence representing an **extreme** departure from the ordinary standard of care. Falling between intent to do wrongful harm and ordinary negligence, gross negligence is defined as willful, wanton, and reckless conduct affecting the life or property or another.‘
-Cornell Law
My opinion: If the update did not receive adequate testing before implementation, that’s just **ordinary negligence**.
But for **gross negligence** to apply, investigators are going to have to prove, or get Crowdstrike to admit, that they willingly launched an update they KNEW was terribly flawed. In other words: they tested the update, it failed, but they launched it anyways. I just can’t see that being the case of what happened here.
Good luck. You will get fooked. The most sensible gambles always go tits up
Calls on SentinelOne (S) baby
im on the fence. I also think theres gonna be major backlash. However So many large companies, mine included, dont seem to have another option. Thats what i was told im not an IT dude
July 26 Puts may be toast, they’re not gonna pull the plug immediately and will need enough exit liquidity by trapping enough FOMO retail first.
If it returns to life as normal on Monday this is a nothing burger.
They were not hacked.
Repeat they were not hacked.
Had they been… it may be a different story but remember OKTA?
Weren’t they hacked and they recovered?
all in on calls Monday will bounce before falling off a cliff
There we go
The best part is that CRWD was already wildly overvalued before this event. It has so much room to fall. Along with puts, I would be picking up other players in the sector, PANW, BB, FTNT, S etc.. I agree with most of your summary except the gross negligence part.
The “glitch” caused me to lose $30,000 due to Schwab not being able to place orders.
Just point the way to the class action lawsuit.
Calls it is
Nah, government would bail them out or whatever. My calls are maybe safe inversing you all
Good luck
I’ll wait for the dump at next earnings. Then I’ll buy LEAPS. Everyone is overreacting. If the outage lasted days then this case would make sense. You’ll all get roasted on your options.
Many people lost their lives due to this outage. It wasn’t a couple hour outage. Most places such as hospitals were down for 24hrs.
It wasn’t just a bad screw up, it can’t happen again. They’ll be sued to oblivion and if they survive they will have government oversight/regulations up the ass
What about the “too big to fail” theory?
I don’t think you understand how many customers CrowdStrike really has… this outage proved it with how many facilities went down. They will recover and boom in the next couple years.
Im buying calls
Let’s be real, switching away from a service you depended on THAT much is a huge pain in the ass and wont be bothered with.
Calls it is
Not American but would the gov call an enquiry like they did on Facebook or TikTok or during the GameStop squeeze
Sold a put on Friday and got assigned a 100 shares. $306 is my average cost. Planning on holding it for at least a month to see how it goes. Prolly gonna sell way OTM covered calls to further average down if needed.
Safest play would be to bet on their competition.
Depends how many rich people will lose out and what they are willing to do to save it. Sacking a CEO and promising it will never happen again sometimes is enough.
Vanguard own the most shares at near 7% and they are no fools. They will do everything they can to save it. I don’t think it’s as simple as just saying they are down for the count due to this crisis.
Boeing planes killed 100s of people and continually have major faults like windows and wheels flying off mid-flight. Boeing isn’t going out of business. It’s just Boeing and Airbus; there isn’t the competition for it to go out of business.
The fentanyl crisis killed millions and there were lawsuits everywhere, but the big pharmaceutical companies who caused it never saw it as an existential threat. Despite pretty much colluding in it.
Capitalists and capital are very adaptable; the only thing that often kills a company is lack of capital ($); CrowdStrike just became profitable this year and earnings were expected to increase by 30%.
Is this fatal?
It has a 74B market cap even with this crisis it’s share price over 6-month (after this crisis) is up by a marginal 2% and it still, for the time being, has a 24% market share. I can only see 3 competitors that could realistically take over from them.
If they position themselves as the “we know how this happened so we are the ones best suited to make sure this never happens again” then is Microsoft chucking them away? I’m not convinced.
Linux based systems hardly affected but we have too much trust in Microsoft.
Why not short Microsoft?
!RemindMe 1 week
You are probably right, but never underestimate the power of dip-buying crowd
don’t forget to post the losses, if anything this incident is an opportunity for the big Boyz to buy in before it hits 400 this year 😄
One thing I will add. When events like this happen, companies can usually learn from them and strengthen their controls and lessen the likelihood of a second occurrence.
EDR is expensive, anybody mid contract wont be dropping CrowdStrike for something else
So many people loading puts I might buy calls fuckit
If the puts on them don’t print, then one’s on their customers surely will!
!Banbet CRWD 210 7d