“CrowdSink’s” Cruel Summer Escalates as Delta Taps Real-Life Harvey Specter for $500,000,000 Lawsuit

The S&P 500 and Nasdaq tripped over their own feet today as tech stocks struggled ahead of major earnings reports. 

The S&P 500 dropped 0.6%, and the Nasdaq fell 1.3%, while the Dow Jones defied the trend, rising 0.4%. 

Nvidia shares nosedived over 5.5%, and Microsoft slipped 1.5%. With Microsoft reporting after the bell, the entire tech world is holding its breath, hoping for a savior to turn things around.

Before we get into our main story, here’s today’s heatmap.

CrowdSink’s Cruel Summer Escalates as Delta Taps Real-Life Harvey Specter for Lawsuit

Just when you thought it couldn't get any worse for CrowdStrike, the cybersecurity giant finds itself in even deeper trouble. Following their massive IT meltdown on July 19, the company's been facing a “Cruel Summer” as Taylor Swift would say. They've seen a whopping 40% drop, and now, Delta Air Lines has jumped into the mix, with a fresh new lawsuit.

Today alone, CrowdStrike’s stock dropped 11% to hit its lowest level of the year. The latest blow? Delta has hired the legal heavyweight David Boies and his firm to seek compensation from CrowdStrike and Microsoft. 

For those not in the legal know, For those not in the legal know, Boies is like the Harvey Specter of the courtroom, taking on big cases and winning against giants like Microsoft despite being dyslexic. (No I didn’t make that up.)

Delta isn’t just dealing with some annoyed passengers—they're drowning in 176,000 refund and reimbursement requests after canceling nearly 7,000 flights. So what’s the final number? A staggering $350 million to $500 million. No wonder Delta wants someone to foot the bill for this colossal mess. The Department of Transportation isn’t sitting this one out either. They’ve launched an investigation into Delta’s widespread service failures, adding more drama to this reality series.

Meanwhile, Delta's competitors managed to keep their heads above water. United Airlines, for example, canceled 694 flights—not great, but a far cry from Delta’s 1,207. While other airlines quickly bounced back, Delta was left frantically rebooting systems like they were trying to restart a stubborn old computer.

(Source: Wired)

For CrowdStrike, the challenges are piling up faster than my dirty clothes basket. With close to half of their market value evaporated and legal battles looming, things are looking pretty grim. But despite all of this, I still don’t think panic-selling CrowdStrike is the smartest move here.

CrowdStrike continues to be a crucial player in the cybersecurity market. Despite the recent wave of negative news, which makes the company look like it's wearing a clown suit, let's not forget that CrowdStrike has successfully prevented numerous cyber threats that could have led to even bigger disasters. And the number crunchers tend to agree. In fact, CrowdStrike is now trading $66 below Morningstar’s Fair Value Estimate. So, while things look rough now, there might still be hope for a turnaround.

Stock.News has positions in Microsoft and United Airlines.