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Why CrowdStrike Stock Fell Today

By Evan Niu, CFA – Jun 26, 2020 at 2:14PM

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A prominent shareholder is reportedly lining up a sale of millions of shares.

What happened

Shares of CrowdStrike Holdings (CRWD -0.55%) have fallen today, down by 6% as of 1:20 p.m. EDT, following reports that a large shareholder is looking to unload millions of shares. The news comes as the stock has more than tripled from its March lows, and has more than doubled year to date.

So what

A prominent shareholder is trying to arrange a deal with investment bank Barclays to sell 7.5 million shares at a price of $104 to $104.71, according to Bloomberg. Those prices would represent a modest discount to yesterday's close, but shares have since fallen below that range. It's unclear who the selling stockholder is.

Red stock chart showing a downward trend

Image source: Getty Images.

Co-founder and CEO George Kurtz is the only executive who holds over 7.5 million shares, according to the tech company's most recent proxy. Kurtz currently holds a little over 18 million Class B shares. However, CrowdStrike has three prominent institutional shareholders with substantial positions:

Institutional Investor

Class A Shares Held

Class B Shares Held

Total

Warburg Pincus

0

17.5 million

17.5 million

Accel

650,000

24.7 million

25.4 million

T. Rowe Price Group

13.4 million

0

13.4 million

Data source: Proxy statement. Figures rounded.

Supervoting Class B shares held by insiders can be converted to Class A shares before being sold to public investors.

Now what

When major shareholders are looking for an orderly way to cash out a large chunk of shares, it's not uncommon for them to work with investment bankers to set up an offering, to minimize potential disruptions to the market that could be caused by selling pressure. Now many investors just want to know who the selling shareholder is.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CrowdStrike Holdings. The Motley Fool has a disclosure policy.

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Stocks Mentioned

CrowdStrike Holdings, Inc. Stock Quote
CrowdStrike Holdings, Inc.
CRWD
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