CrowdStrike estimates the tech meltdown caused by its bungling left a $60 million dent in its sales

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By MICHAEL LIEDTKE

Cybersecurity specialist CrowdStrike Holdings on Wednesday estimated it absorbed a roughly $60 million blow to its sales pipeline last month after its botched handling of a software update triggered a technology meltdown that stranded thousands of people in airports in addition to other exasperating disruptions.

Although the massive outage spooked customers that had been expected to close deals totaling $60 million during the final few weeks of CrowdStrike’s fiscal second quarter, executives running the Austin, Texas, company predicted it will still be able to cinch those contracts before its fiscal year ends in January 2025 because customers still have faith in its cybersecurity products despite the July 19 gaffe that froze up machines running on Windows software.

“Our mission is alive and well, and I know that CrowdStrike’s very best days are ahead of us,” CrowdStrike CEO George Kurtz told analysts during a conference call covering the company’s April-July period. He also apologized for the company’s role in an outage that he said “will never be lost on me, and my commitment is to make sure this never happens again. The days following the incident were among the most challenging in my career because I deeply felt what our customers experienced.”

Kurtz’s reassuring comments, coupled with quarterly earnings that exceeded analysts’ projections, seemed to reassure investors who have been buying up CrowdStrike’s stock in recent weeks after initially dumping the shares in the wake of the havoc that the company blamed on a computer bug. The shares rose slightly in Wednesday’s extended trading, leaving the stock price 13% below its level before the tech outage — a loss of about $10 billion in market value. Earlier this month, CrowdStrike’s shares plunged nearly 25%, knocking off more than $20 billion in market value.

Even if the $60 million in deals that CrowdStrike expected to close before the tech meltdown never happen, that will be a minor price to pay compared to the massive bills those affected by the outage are facing.

Delta Air Lines, for instance, has estimated that it may owe its customers $380 million after the CrowdStrike-induced outage fouled up its computer systems so horribly that it had to cancel about 7,000 flights. Delta has threatened to sue CrowdStrike, which has insisted that the airline is using the tech outage as an excuse for its own bungling.

CrowdStrike didn’t provide an estimate of legal expenses it may face from the outage, but indicated the bills probably won’t be too burdensome.

“Our customer agreements contain provisions limiting our liability, and we maintain insurance policies intended to mitigate the potential impact of certain claims,” Burt Podbere, CrowdStrike’s chief financial officer, said during Wednesday’s conference call.

High School Football: Week 1 Thursday predictions

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Thursday provides a heavy slate of Week 1 contests for the Minnesota high school football season. Well, at least they’re scheduled for Thursday. The prospect of weather on Thursday evening is already causing shifting of game times, with some contests already being moved up to afternoon kickoffs and other games pushing back to Friday.

Stillwater at Lakeville North, 7 p.m.

Two Class 6A state tournament teams from a year ago who should have similarly high expectations again this fall. Just how good will they be? Thursday will be an excellent gauge.

The Ponies return a lot defensively, and Stillwater’s passing game is often a bear to defend in August. But star quarterback Nick Kinsey will have to establish new connections with pass catchers.

On the flip side, Riley Grossman is back for his fourth year under center for Lakeville North, and all of his weapons return. Lakeville North’s passing game could be something to write home about this fall. Our pick: Lakeville North 31, Stillwater 21

St. Thomas Academy at Andover, 7 p.m.

Both teams fell in overtime to Chanhassen at U.S. Bank Stadium in 2023 – Andover in the Class 5A semis, and the Cadets in the Prep Bowl. Both also lost all-world skill position talents to graduation, as Cadets running back Savion Hart and Andover quarterback Chase Pemberton are onto the next step.

But Andover’s Hudson Maynard was excellent filling in when Pemberton was injured last season. That experience should help the Huskies come out of the gates fast, even against a St. Thomas Academy secondary featuring standouts like Avery Buckner and Finn Benz.

But don’t count the loser of this game out by any stretch. St. Thomas Academy fell by 26 to Andover in last season’s opener, and it did nothing to deter the Cadets. Our pick: Andover 31, St. Thomas Academy 28

Hill-Murray at Becker, 7 p.m.

Legendary Becker coach Dwight Lundeen could notch career win No. 400 on Thursday, but it won’t come easy. Not against a Pioneers team that reached the Class 4A state tournament last season.

Hill-Murray returns a few key skill players, including quarterback Jackson Reeves. But he’ll have to navigate potentially rough waters in the early going as a brand-new offensive line finds its bearing. That’s not a dream recipe when opening the season against a perennial powerhouse. Our pick: Becker 21, Hill-Murray 14

Mounds View at Farmington, 7 p.m.

Two potentially dangerous teams in Class 6A, Farmington returns a boatload of skill position players on offense, while Mounds View was a feisty young squad in 2023 that will be experienced this fall and has returning starters in many key areas on the field.

The Mustangs have the potential to win the Metro East this year. Our pick: Mounds View 24, Farmington 18

East Ridge at Park, 6 p.m.

East Ridge lost a lot from last year’s Class 6A state tournament team, so perhaps this is a chance for Park to pull off an upset against its district rival? If nothing else, it will be interesting to see how the Raptors’ offensive approach shifts following the graduation of star quarterback Tanner Zolnosky.

And Park’s high-powered offense is always good for a show. Our pick: East Ridge 35, Park 20

St. Paul Mayor Melvin Carter helps clear trash from Lowry basement as court appoints emergency receiver

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Dressed in a reflective work vest and gloves, St. Paul Mayor Melvin Carter joined city workers for several hours Wednesday in clearing torn and soiled sofas, couches and other large, bulky, cast-away items from the basement of the troubled Lowry Apartments across from downtown City Hall.

The mayor helped fill four truckloads with trash by early afternoon, by which time at least half a dozen broken coin-operated washing machines — their coin compartments pried open — lined the Fourth Street sidewalk, waiting to be hauled away.

“Our team has been here since 8 in the morning,” said Carter, around 1 p.m. “This isn’t people’s stuff who live here right now. This is stuff that’s been piled up in the basement. Nobody’s been managing the building. The goal today is just the obvious fire hazard stuff … trying to get this stuff out of here. The guys who do this for a living, all day everyday, say they’re throwing away their clothes. This is disgusting.”

Court-appointed receiver

While the mayor helped clear debris, an assistant city attorney appeared in a courtroom across the street Wednesday morning, asking a Ramsey County District Court judge to fast-track a request for a court-appointed receiver to collect rents and better manage the 11-story building, which is in foreclosure.

Judge Sara Grewing agreed, assigning receivership to Frauenshuh, Inc., a commercial real estate company, and setting in motion what some hope will be better days ahead for what had once been one of downtown St. Paul’s most sought-after destination hotels.

Among Grewing’s seven findings: there is currently no contact on site for building management, city photos showed evidence of dog feces and drug paraphernalia strewn about hallways, elevators are often inoperable, the roof is not secured, broken doors and blocked off stairwells are a fire hazard, abandoned couches and other furniture is haphazardly strewn throughout the basement, and trash accumulating throughout the Lowry “is so significant that it could impede or prevent fire rescue.”

An attorney for Madison Equities — which had attempted to sell the Lowry on the traditional market — could not immediately be reached for comment on Wednesday.

“This receivership step is critical,” said City Council President Mitra Jalali, on the social media platform X on Wednesday. “It allows a more responsible party to work (with the) city on immediate health, cleaning, safety efforts underway at Lowry.”

As a precautionary measure on Wednesday afternoon, the St. Paul Fire Department sent a large crew of firefighters to 345 Wabasha St. for “building familiarization walk-throughs,” according to the department’s social media. “This is to note any hazards in the event of an emergency.”

Too little, too late?

Carter this week sent a strongly-worded letter to property owner Madison Equities, which the city has accused of effectively abandoning management of the building. The mayor on Monday made a personal call to a repair company and found $2,000 to get the elevators, which had been offline since Saturday, back in working order so residents could begin moving out, if need be.

On social media, some observers praised the mayor’s hands-on approach, while others derided it as a “photo op” and questioned why the city and county hadn’t coordinated efforts earlier to keep the property from becoming derelict. Following a building tour on Monday, Carter and City Attorney Lyndsey Olson said living conditions were among the worst they’d seen in the city. An entire floor and seven additional units have been condemned.

“Where were they two years ago when the fire escapes were dead-bolted closed and my sister, who is disabled, was stuck on the 11th floor?” said Anthony Kearns, a two-year lease holder, while riding the dingy elevator to the lobby. He said the city would be best served by emptying the building entirely.

“It’s been a nightmare,” Kearns added.

Carter noted that a recently-delayed foreclosure auction is now scheduled for early September, but the mayor said that’s too long to wait for responsible stewardship of a building home to more than 100 tenants, some of whom have children there. Dozens of those families receive rental assistance, such as federal Section 8 housing vouchers, meaning Madison Equities continues to receive at least partial rent payments, the mayor said.

New challenges: trash service canceled

FirstService Residential — the property management company that oversees the nearby Lowry Medical Arts building, which houses residential condominiums and the St. Paul Conservatory — informed property managers for the Lowry last Friday that they would no longer allow shared use of their basement trash room and trash compactor. After Saturday, the Lowry Apartments will now have to find a new trash service.

“If any staff, resident or personnel are found dumping garbage in the trash compactor or trespassing on Lowry Commercial property, law enforcement will be notified, and they will be issued citation for illegal dumping and for trespassing,” reads the Aug. 23 letter from FirstService Residential to the Lowry Apartments.

The city of St. Paul’s Department of Safety and Inspections recently informed Madison Equities that they would be cancelling the building’s Fire Certificate of Occupancy, meaning that if conditions don’t improve, the building would have to be cleared of tenants by April. Some county officials have quietly opined that the city — which has already condemned multiple insect-infested units — could condemn the entire property, giving tenants 60 days to relocate before winter.

Carter said the the city is taking pains to balance fire safety priorities against the possibility of leaving dozens of tenants homeless. Safely removing so many tenants would require careful coordination between the city, county and nonprofit providers of emergency housing. Many, but not all of the families already have caseworkers assigned.

Rose Lindsay, a spokesperson for Ramsey County, said the county just learned of the issues facing the Lowry residents on Aug. 15 and is coordinating with the city’s Office of Neighborhood Safety. The city and county hosted an informational meeting on Aug. 21 to inform tenants of their rights and responsibilities as ownership changes hands.

“Since we received notification, we have been working closely with the city of St. Paul on a response plan to provide resources,” Lindsay said.

Madison Equities’ principal, Jim Crockarell, died in January. In addition to the Lowry Apartments, his widow, Rosemary Kortgard, has put nine downtown office buildings and parking ramps spanning more than 1.6 million square feet of commercial real estate on the market en masse, as well as the Handsome Hog restaurant on Selby Avenue.

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Woodbury state senator pleads not guilty to burglarizing stepmother’s home

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DETROIT LAKES, Minn. — A Twin Cities state senator has pleaded not guilty to burglarizing the home of her estranged stepmother after her father’s death.

Sen. Nicole Mitchell, DFL-Woodbury. (Courtesy of the Minnesota Senate)

Sen. Nicole Mitchell, a Democrat from Woodbury, was charged in April. She told police at the time that she broke into the home in the northwestern Minnesota town of Detroit Lakes because her stepmother refused to give her items of sentimental value from her late father, including his ashes, according to the felony criminal complaint.

In a joint court filing Tuesday, defense and prosecution attorneys said Mitchell was pleading not guilty, and was asking the court to schedule both a settlement conference and jury trial.

The two sides also agreed that prosecutors won’t be able to argue that Mitchell stole a laptop computer that police seized when they arrested her. Ownership of the laptop had been in dispute. The agreement says that prosecutors can, however, use evidence from the laptop if the case goes to trial.

Mitchell’s arrest roiled the 2024 legislative session, which came to an acrimonious end, and ethics proceedings against her remain on hold pending developments in her criminal case. She denied stealing and rejected Republican calls for her resignation. Her status posed a dilemma for her fellow Democrats because they held only a one-seat majority in the Senate, so they needed her vote to pass anything that lacked bipartisan support. They excluded her from caucus meetings and took her off her committees but did not publicly ask her to step down.

Mitchell was dressed all in black and wearing a black hat when she was arrested, the complaint said, and it quoted her as saying, “I know I did something bad.”

Her attorney has said that her dispute with her stepmother arose out of a “fractured relationship” that was aggravated by age-related issues.

Mitchell’s father died in March 2023 at the age of 72, according to his obituary. He had been married to Mitchell’s stepmother for 40 years, it said.

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