Deniz 
Following a faulty software update that resulted in a worldwide computer outage, Monday’s share prices for American cybersecurity technology company CrowdStrike kept dropping. Jimmy Su, Chief Security Officer at Binance, notes that the centralized nature of computers suggests such events in the future are probably inevitable.
CrowdStrike Shares Plummet After IT Outage
On July 22, stock for CrowdStrike Holdings Inc. (CRWD) dropped another 13%. The tech stock dropped to $263 in after-hours trading. Since a faulty software upgrade on July 19 resulted in a global IT outage, the company’s share value has dropped by 30% thus far this month; 23% of it is attributable.
Google Finance shows CrowdStrike shares hit an all-time high of $392 on July 1, but, since then, they have dropped 33% to their lowest level since early January.
Reportedly benefiting from the company’s 23% two-day stock price drop—the largest in its history—short sellers made $978 million, said Bloomberg on July 22. With CrowdStrike the second-most shorted business after Microsoft, the cybersecurity software industry has attracted growing short interest of around $12 billion this year.
Analysts’ Outlook on CrowdStrike’s Future
Following the incident, analysts have discounted CrowdStrike’s stock and decreased price estimates.
“We find it difficult to tell investors that they need to buy CRWD right now,” wrote Guggenheim analysts headed by John DiFucci in a July 21 note.
Guggenheim deleted its $424 price objective on CRWD, although it added the company “will eventually become even stronger as a result of this incident.”
Notwithstanding the setback, many Wall Street analysts remain positive about the company long-term; their average price objective points to a 40% increase from present levels.
“While many traditional industries such as banking, healthcare, and airlines were affected by the software outage, key blockchain and crypto networks continued to run normally due to their distributed nature,” said Jimmy Su. He noted that the last outage of the Bitcoin network was about 4,150 days ago, or more than 11 years without any disruptions.
“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 remarked before closing.
“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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