A 718-Million-Dollar Clerical Clanger
Investors are still recovering from an earnings release last week that was anything but routine. Crowdstrike made a very expensive typo in its reporting. This is a story some would rather we didn’t share, but here goes!
If you’re the sudden victim of a cyber attack, Crowdstrike is the first company to get on the blower. The technology specialist sells endpoint security and threat intelligence, acting as a first responder for the likes of the Democratic National Committee, Telstra, and Goldman Sachs!
On Thursday, its third-quarter earnings came due. Bearing in mind shares were already down 40% due to unprofitability pressures and cold market sentiment; these numbers were arriving against a critical backdrop for Wall Street. Investors sat patiently for the numbers to hit their monitors, and then, the numbers hit their monitors!
“The company is reporting Q4 guidance of a loss of 9 cents per share on $38 million in revenue.”
Wait, $38 million in revenue? There are earnings surprises, and then there’s that. Crowdstrike normally does $136 million!
Market players paused in bemusement before rushing to their Quotrons to fill sell orders. Down 6% in minutes, it was all hands on deck for Crowdstrike’s investor relations department, throwing together an announcement. “Typo!” It turns out the newswire missed out the number one, so the real guidance was $138 million, not $38 million. Market players stood in bemusement again before rushing back to their Quotrons to undo everything!
The stock reversed nearly all of its losses, but someone’s getting fired!