CrowdStrike‘s (Nasdaq: CRWD) price plunged more than 10% on Friday following the global outage it caused.
I initially planned to hold my small CrowdStrike position as I’m interested to learn the extent of their legal liability and the impact on their business. Selling would probably provide similar learning opportunities, but without a stake, I likely wouldn’t follow developments as closely.
Through Seeking Alpha, I came to know about SentinelOne (NYSE: S), a smaller competitor to CrowdStrike. While boasting tremendous revenue growth (doubling annually for the first two years since its 2020 listing), this growth came from a smaller base. Last year’s growth slowed to 47%, and the guidance going forward is in the 30% range.
SentinelOne remains on my watchlist as it is still unprofitable and its cash flow only turned positive in the recent quarter. It is only due to Friday’s event that lead me to revisit it this morning. I was surprised to see a year-to-date drop exceeding 20% due to weaker annual guidance after their latest quarter.
Hoping SentinelOne might capitalise on CrowdStrike’s misstep, I decided to take a small initial stake. Unfortunately, by the time I could check the market, CrowdStrike was down another 10% and SentinelOne was up another 10% since last Friday.
While likely not the most strategic move, I divested part of my CrowdStrike holding and initiated a position in SentinelOne. This is purely speculative, and the outcome is uncertain.
For transparency, my CrowdStrike sales in June and July yielded an average return of approximately 55%.
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