To The Moon

$CrowdStrike Holdings, Inc.(CRWD)$ is experiencing a perfect storm of negative events. The stock price has plummeted 11% following news that $Delta Air Lines(DAL)$ has hired David Boies to seek damages for the recent tech outage caused by a CrowdStrike software update. This, coupled with the ongoing market uncertainty, creates a challenging environment for the company.

David Boies

The potential legal battle with Delta is a significant development. David Boies, a renowned litigator, is known for his aggressive approach. If CrowdStrike finds itself defending against multiple lawsuits from major corporations, it could divert significant resources and potentially damage the company's reputation.

CRWD Daily Chart showing price breaking every support level

The broader market sentiment is also contributing to CRWD's decline. The tech sector has been under pressure, and the recent geopolitical tensions haven't helped. This creates a challenging backdrop for high-growth stocks like CRWD.

Despite the recent downturn, CRWD still commands a premium valuation. The price-to-sales ratio remains elevated, reflecting the market's high expectations for future growth. However, with increasing competition in the cybersecurity space and the potential for legal challenges, achieving those expectations might be more difficult than previously anticipated.

While I believe in the long-term potential of cybersecurity as a growth industry, the current situation for CRWD is concerning. The legal battle with Delta, combined with the broader market uncertainty, creates a high degree of risk.

I'm adopting a cautious approach and closely monitoring the situation. If the stock price continues to decline and the valuation becomes more attractive, I might consider starting a position. However, for now, I'm staying on the sidelines and waiting for more clarity on the legal situation and the overall market outlook.

In short, I am NOT buying the dip here.

Disclaimer: This is just my analysis, and the market is unpredictable. Do your own research before making any investment decisions.

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