CrowdStrike global losses in the billions, CRWD drops 25%, Ark Invest increases buying.

The technical update issue from cybersecurity giant CrowdStrike caused around 8.5 million computers worldwide to crash on July 19, affecting industries such as financial services, healthcare, and media. According to estimates from Moody's and several insurance companies, global losses are initially estimated to be in the billions of dollars. CrowdStrike's stock price continues to fall, dropping 25% from $342 before the incident to yesterday's price.

Background: Microsoft and CrowdStrike issue leads to the largest IT crash in history

Microsoft: It's all EU's fault

According to a report by Central News Agency, Microsoft attributed the recent event to an agreement reached with the EU in 2009, which restricted the company from making security adjustments, thus failing to block the software update issue from cybersecurity company Crowdstrike.

While Microsoft has its own security software Windows Defender, due to the agreement signed in 2009 to avoid an EU antitrust investigation, Microsoft allowed multiple cybersecurity providers to install software at the core of computers. In contrast, Microsoft's competitor Apple chose to close off access to its Mac core in 2020, claiming that this action would enhance security and reliability.

Global losses initially estimated in the billions

Reuters quoted estimates from insurance company Parametrix, suggesting that Fortune 500 companies, excluding Microsoft, may incur losses up to $5.4 billion due to the crash, with insurance losses estimated at $540 million to $1.08 billion.

International credit rating agency Fitch Ratings also believes that the initial estimated insurance losses from this event could fall within the high hundreds of millions range, with most claims falling within the scope of primary insurers. Global insurance and reinsurance companies may be able to avoid significant financial impacts from global Microsoft crashes caused by CrowdStrike software updates.

CRWD drops 25%, Ark Invest buys more

Crowdstrike's stock price continues to decline, dropping 25% from $342 before the incident to yesterday.

Despite the decline, Cathie Wood of Ark Invest chose to buy more at the dip, with Ark purchasing around $11.77 million worth of CrowdStrike stock at around $305 per share last Friday.

As of July 24th, ARK Next Generation Internet ETF ARKW holds $29.87 million worth of CrowdStrike, accounting for 2.02% of its total fund assets. Ark Fintech Innovation ARKF holds $11.91 million worth of CRWD, representing 1.33% of its total fund.

Crowdstrike offers $10 gift card as an apology?

As the Crowdstrike incident remains unresolved, reports emerged that Crowdstrike is offering $10 gift cards as an apology! According to TechCrunch, Crowdstrike's business director Daniel Bernard sent an email to its contractors, stating:

"As a token of our appreciation, your next coffee or dinner is on us!"

Along with a $10 Uber Eats discount code.

However, some individuals received error messages when trying to redeem, stating that the coupon had been canceled.

CrowdStrike spokesperson Kevin Benacci stated:

"We did indeed send these messages to teammates and partners who have been helping customers through challenging times. Due to high usage, Uber flagged it as fraudulent."