CrowdStrike shares tumbled by 11% on Tuesday, hitting their lowest point of the year, following reports that Delta Air Lines has hired prominent lawyer David Boies to pursue damages from the cybersecurity firm.
The company's share price dropped by $28.98 to $228.83 during early afternoon trading. This decline represents a loss of over one-third of its value since 19 July, when a significant outage of Microsoft systems, caused by a software update from CrowdStrike, disrupted operations across various industries, including airlines.
On Monday evening, CNBC's Phil Lebeau reported that Delta had engaged Boies, chairman of Boies Schiller Flexner, to seek compensation from both CrowdStrike and Microsoft for the disruption. While no lawsuit has been formally filed, and Delta has not responded to requests for comment, the news sent shockwaves through the market.
Delta is currently grappling with over 176,000 refund or reimbursement requests following the cancellation of almost 7,000 flights. The outage is estimated to have cost the airline between $350 million and $500 million.
The Department of Transportation has launched an investigation into Delta's handling of the widespread flight disruptions and service failures, which occurred last week.
Boies is renowned for his legal prowess, having represented the US government in its landmark antitrust case against Microsoft and for securing a ruling that overturned California's ban on same-sex marriage. He has also worked with high-profile figures such as Harvey Weinstein, the imprisoned former Hollywood mogul, and Theranos founder Elizabeth Holmes, who is currently serving a prison sentence for fraud.
The impact of this legal action remains to be seen, but it is clear that the fallout from the Microsoft outage continues to reverberate through the business world.
