Hours after Rep. Adam Schiff led off the impeachment hearing on Wednesday with reference to the "discredited 2016 CrowdStrike conspiracy theory," shares of the cybersecurity company closed up 11%, its biggest rally in four months.
CrowdStrike, which went public in June, started capturing headlines of a very different nature in September, after the release of a July call summary between President Donald Trump and Volodymyr Zelensky, president of Ukraine. On the call, Trump referenced a CrowdStrike server that was supposedly being held in Ukraine.
CrowdStrike's name was likely invoked by Trump at the time because the company assisted the Democratic National Committee in investigating a 2016 hack by Russian operatives, who were trying to influence the presidential elections.
Schiff, the Democratic chairman of the House Intelligence Committee and the representative running Wednesday's proceedings, brought up CrowdStrike in the context of Trump's efforts to put pressure on Ukrainian leaders on the July 25 call with Zelensky. Trump asked Zelenskiy to investigate former Vice President Joe Biden, a potential Democratic rival for the 2020 election, and his son Hunter, who was on the board of Ukrainian energy company Burisma. Trump also asked Ukraine's president to "do us a favor though" and look into Ukraine's alleged role in the 2016 election.
"Trump then requested that Zelensky investigate a discredited 2016 CrowdStrike conspiracy theory and even more ominously look into the Bidens," Schiff said, referring to the call. "Neither of these investigations was in the U.S. national interest and neither was part of the official preparatory material for the call. Both, however, were in Donald Trump's personal interest and any interest of his 2020 reeelection campaign."
CrowdStrike shares rose throughout the day, closing up $4.95 at $52. It was the stock's third biggest gain in the five months since its debut.
Erik Suppiger, an analyst at JMP Securities, wrote in an email that the testimony "could explain part of the strength in CRWD." The stock got a bump on Tuesday after Goldman Sachs analysts raised their rating to neutral from sell, in part because of the recent selloff — the stock is 48% off its high from August.
A CrowdStrike spokesperson didn't respond to a request for comment. After the call summary was released in September, the company said that following its investigation, it "provided all forensic evidence and analysis to the FBI" and that its conclusions "have been fully supported by the US intelligence community." CrowdStrike CEO George Kurtz told CNBC that Trump's comments were "unintelligible."
It's unlikely to be the last time CrowdStrike's name comes up in the impeachment hearings. Gordon Sondland, the U.S. ambassador to the European Union, is set to testify next week. Sondland revised his original testimony from the private hearing to add that he conveyed to a Ukrainian counterpart that Trump would not release nearly $400 million in foreign aid until the country agreed to launch specific investigations sought by Trump.
Schiff said on Wednesday that "Sondland and others had been pressing Ukraine for weeks about investigations into the 2016 election, Burisma and the Bidens."