A Tale of CrowdStrike: Crisis or Opportunity?

Golden Opportunity or Value Trap?

The world recently witnessed one of the most extensive IT outages in modern history, affecting approximately 8.5 million Windows devices according to a Microsoft spokesman. A routine update aimed at enhancing security on Windows enterprise forced many businesses to cease operations as Windows devices displayed the infamous "Blue Screen of Death".

This event has had a significant impact on the stock of cybersecurity provider CrowdStrike CRWD 0.00%↑, which has seen its shares drop double digits for two consecutive days. On Monday, CrowdStrike shares fell another 13%-ish to $269 after an 11% drop on Friday, marking a 32% decline from its early July all-time high (ATH). The stock slightly recovered during Tuesday’s trading session.

Outlining The Structure of This Post

In this article, I'll explore whether this decline in what is undeniably a high-quality stock represents an interesting buying opportunity, seeing it as a temporary setback, or …

… whether the reasons to stay away outweigh potential gains.

By asking, "What would Buffett do?", I will try to frame the following discussion around two prominent quotes from Warren Buffett that, however, cannot BOTH AT THE SAME TIME describe the situation at CrowdStrike accurately - think of them as two different ends of the "Buy CrowdStrike Now” continuum?

1.     "A great investment opportunity arises when a marvelous business encounters a one-time, huge, but solvable problem."

2.     “It takes 20 years to build a reputation and five minutes to ruin it.”