It was more about what the company isn’t doing about a recent crisis, rather than what it is doing.
Inaction rather than action was a key cause of tech incumbent Microsoft‘s (MSFT -3.58%) stock dip on Wednesday. A media report stating that the company is apparently unwilling to modify its relationship with a troubled business partner dampened investor sentiment. Ultimately, the shares closed the day nearly 4% lower, a worse performance than the 2.3% dip of the S&P 500 index.
Hands off, mouth shut?
In a brief article published that morning and citing an unidentified “person familiar with the issue,” Reuters said that there is no indication the company plans to limit CrowdStrike‘s (CRWD -3.99%) access to Microsoft’s Windows operating system.
The news agency did not elaborate, and Microsoft has not yet commented on the story.
Last Friday, CrowdStrike updated its cloud-based software offerings. This didn’t exactly go smoothly; a defect found its way into the update, and it crashed millions of Microsoft Windows devices throughout the world. Many of these devices were operated by businesses dependent on them, and the resulting shutdowns were extremely disruptive in numerous instances.
More communication would be wise
CrowdStrike isn’t doing a good job of handling the fallout from the crisis and reassuring clients, and Microsoft isn’t pursuing a much smarter strategy. It seems determined to maintain silence on the issue, likely in a play at keeping CrowdStrike sweet (the cybersecurity company is still an important business partner, at least as of this writing).
Neither is a particularly wise approach since many of those customers suffered real reputational and even financial damage from the incident. Microsoft wasn’t directly responsible, of course, but it wouldn’t hurt the company to be more communicative and contrite about the matter.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
