CrowdStrike stock falls another 13% on Monday, days after global IT outage
Share prices for American cybersecurity technology company CrowdStrike continued to decline on Monday following a botched software update that caused a global computer outage.
Jimmy Su, Chief Security Officer at Binance says there are likely to be similar incidents in the future due to the centralized nature of computing.
Stock for CrowdStrike Holdings Inc. (CRWD) fell a further 13% on July 22. As a result, the tech stock declined to $263 in after-hours trading.
The company has seen its share value devalue by 30% so far this month, 23% of that since it caused a worldwide IT outage due to a failed software update on July 19.
CrowdStrike shares hit an all-time high of $392 on July 1, according to Google Finance, but they have lost 33% since then dipping to their lowest level since early January.
CRWD stock price 1 month. Source: GoogleShort sellers profited $978 million from the company's 23% two-day stock price decline, the worst in its history, reported Bloomberg on July 22.
The cybersecurity software sector has seen increased short interest of nearly $12 billion this year, with CrowdStrike being the second-most shorted company after Microsoft.
Analysts have downgraded CrowdStrike's stock and lowered price targets following the incident.
“We find it difficult to tell investors that they need to buy CRWD right now,” wrote Guggenheim analysts led by John DiFucci in a note on July 21.
Guggenheim removed its $424 price target on CRWD but noted that the company “will eventually become even stronger as a result of this incident.”
Despite the setback, many Wall Street analysts remain bullish on the firm long-term, with an average price target suggesting a 40% upside from current levels.
Distributed crypto networks unaffected
While many traditional industries such as banking, healthcare , and airlines were affected by the software outage, key blockchain and crypto networks continued to operate normally due to their distributed nature , stated Jimmy Su, Chief Security Officer at Binance, in a note shared with Cointelegraph.
Related: Microsoft blames Crowdstrike meltdown on 2009 European Union deal
He pointed out that the Bitcoin ( BTC ) network’s last downtime occurred more than 4,150 days ago, which amounts to over 11 years with no interruptions.
“Because the nodes are independent of each other and interchangeable, it doesn’t matter if 5% or 15% of them fail, the network will remain fully functional,” he said before concluding:
“As long as the bulk of the world’s interconnected and interdependent computer systems rely on a centralized, single-point-of-failure architecture, we are likely to experience similar incidents.”
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