Shareholders of CrowdStrike (CRWD.O) have filed a lawsuit against the cybersecurity company, alleging it misled them about the reliability of its software, which led to a global outage on July 19 that affected over 8 million computers. The lawsuit, filed on Tuesday in Austin, Texas federal court, claims that CrowdStrike's assurances about its technology were false and misleading, resulting in a significant drop in the company's stock price.

The plaintiffs, led by the Plymouth County Retirement Association of Plymouth, Massachusetts, claim that CrowdStrike's software update caused disruptions to airlines, banks, hospitals, and emergency services worldwide. As a result, the company's share price fell by 32% over 12 days, wiping out $25 billion in market value. The lawsuit highlights that CrowdStrike's CEO, George Kurtz, was called to testify before the U.S. Congress, and Delta Air Lines (DAL.N) hired lawyer David Boies to seek damages.

The complaint references a March 5 conference call where Kurtz described CrowdStrike's software as "validated, tested, and certified." The plaintiffs argue that these statements were misleading in light of the outage. CrowdStrike's CFO, Burt Podbere, is also named as a defendant.

In response, CrowdStrike stated, "We believe this case lacks merit and we will vigorously defend the company." The lawsuit seeks unspecified damages for holders of CrowdStrike Class A shares between November 29, 2023, and July 29, 2024.

Delta Air Lines CEO Ed Bastian reported that the outage cost his airline $500 million, including lost revenue and compensation for stranded passengers.

CrowdStrike shares closed on Wednesday at $231.96, down from $343.05 the day before the outage.

This lawsuit is part of a broader pattern where shareholders often sue companies following unexpected negative events that lead to stock price declines, and CrowdStrike may face additional legal challenges in the future.