Just days before the global tech outage that was attributed to a corrupted anti-virus update, Shawn Henry, the Chief Security Officer of CrowdStrike, sold 4,000 shares of CrowdStrike Holdings Inc (NASDAQ: CRWD), as per a recent SEC filing.
Following the sale, Henry now holds 183,091 shares of the company, which specializes in cloud-based protection for endpoints, cloud workloads, identity, and data.
The company aims to prevent breaches like the one that caused the recent global tech platforms’ disruption.
Over the past year, Henry has sold 85,986 shares of CrowdStrike at different times and did not make any purchases of the company’s shares during this period.
This selling trend is also observed among other insiders at CrowdStrike, with a total of 48 insiders selling shares in the past year without making any share purchases during the same time frame.
On the day Henry sold his shares, the price of a CrowdStrike share was $371.32, resulting in a market cap of $89.81 billion.
The company’s price-to-earnings ratio is an astonishing 696.32, significantly higher than the industry median of 27.16.
The estimated GF value for CrowdStrike stock is around $346.82, leading to a price-to-GF-Value ratio of 1.07, indicating that the stock is considered fairly valued by the markets.
Investors holding CrowdStrike shares should be aware of routine stock sales by insiders like Henry and others, who are gradually selling their shares without making any new purchases. This behavior raises questions about the future trajectory of CRWD’s stock price.
Following a global outage, CRWD’s price experienced a significant decline of approximately 11 percent, prompting Cathie Wood, CEO of ARK Invest, to acquire $12 million worth of shares.
The outage impacted tens of millions of Microsoft Windows users across various sectors such as airports, hospitals, banks, and retailers. The effects were still being felt at the start of the following week on June 22.
Wood’s ARK Next Generation Internet ETF currently holds $1.45 billion in assets with CRWD representing two percent of the fund.
Additionally, the ARK Fintech Innovation ETF has purchased CRWD and it now represents 1.3 percent of its $893.5 million portfolio.
Despite substantial declines in Wood’s two ETFs since February 2021 peaks, she continues to buy stocks she believes in and hopes they will recover following a market crash.
Wall Street downgraded CRWD’s rating and lowered price targets, causing another 12 percent drop in the stock’s price.
In response to the update failure that affected millions of Microsoft Windows users and caused “Blue Screen of Death” errors on machines preventing proper boot-up, Microsoft released a recovery tool to aid IT admins in repairing impacted machines by creating a bootable USB drive for quick recovery or manually booting into Safe Mode to delete corrupted update files necessary for operation.
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