CrowdStrike Hit With Class Action Lawsuit From Shareholders Over Software Outage

Following the outage, the legal complaint says CrowdStrike’s share price to fall 32 percent over the next 12 days, wiping out $25 billion of market value.

A departure board shows canceled flights in the McNamara terminal at the Detroit Metropolitan Wayne County Airport, Mich., on July 20, 2024. Joe Raedle/Getty Images

Austin-based Cybersecurity firm CrowdStrike is facing a class action lawsuit from shareholders who claim the company defrauded them by concealing how its inadequate software testing could cause a global computer outage, resulting in a big hit to the share price and overall market value.

On July 19, an outage, allegedly sparked by a software update, affected about 8.5 million computers around the world. Airlines, banks, retail and media outlets, and hospitals were among organizations that lost access to computer systems. CrowdStrike has said there was an undetected error in an update for its security software that provides new instructions for the program on how to spot and stop novel threats.