Cathie Wood, CEO of ARK Invest, recently made a significant investment of nearly $12 million in CrowdStrike stock following a major global tech outage caused by the company’s software update. This incident led to an 11% decrease in shares.
The software malfunction in Crowdstrike affected millions of Microsoft (MSFT) Windows users worldwide, resulting in grounded flights, delayed surgeries, disrupted bank operations, and more. The repercussions of this event were still evident on Monday.
During the tech meltdown, two of Wood’s exchange-traded funds increased their positions in CrowdStrike. The ARK Next Generation Internet ETF (ARKW) purchased 27,061 shares valued at approximately $8.25 million, constituting 2% of the fund’s assets. On the other hand, the ARK Fintech Innovation ETF (ARKF) acquired 11,534 shares worth $3.52 million, representing 1.3% of its portfolio.
Wood’s ARK Invest focuses on investing in innovative high-growth companies. While her funds experienced significant growth in 2020 and early 2021, they have faced challenges due to persistent inflation and rising interest rates.
The ARK Next Generation Internet ETF has seen a 29% increase over the past year but remains 56% below its peak in February 2021. Similarly, the ARK Fintech Innovation ETF has grown by 25% in the last year but is still 54% lower compared to its highest point.
Despite these setbacks, Wood continues to invest in companies she believes in, anticipating their recovery. However, CrowdStrike shares dropped by an additional 12% on Monday due to Wall Street rating downgrades and reduced price targets.