James Franey
A New York state pension fund is facing significant losses after investing $75 million in CrowdStrike just before a major IT crisis. As of August 12, 2024, the New York State Teachers’ Retirement System (NYSTRS) has seen its investment drop nearly $30 million following a software failure that impacted millions globally.
The NYSTRS had acquired 197,462 shares of CrowdStrike, which has since plummeted in value. The fund, which manages around $137 billion in assets, is now dealing with the repercussions of this unfortunate timing.
Key takeaways:
- NY pension fund invested $75 million in CrowdStrike.
- Investment lost nearly $30 million after a software crisis.
- CrowdStrike’s shares dropped 38% since July 19.
- NYSTRS manages approximately $137 billion in assets.
New York Pension Fund’s Troubling Investment in CrowdStrike Amid IT Crisis
The New York State Teachers’ Retirement System (NYSTRS) recently faced a major setback after investing in CrowdStrike, a cybersecurity firm. The NYSTRS bought nearly 200,000 shares worth over $75 million. However, after a software failure led to a global IT crisis, the value of these shares plummeted by 38%. This has resulted in a staggering loss of approximately $28.5 million for the pension fund.
Impact of CrowdStrike’s Software Failure on Investors and Airlines
The software failure at CrowdStrike affected millions of computers worldwide, causing widespread disruptions. Major airlines, including Delta, were particularly hard hit, with thousands of flights canceled. Delta’s CEO has stated that the incident cost the airline at least $500 million. This crisis has led to shareholders suing CrowdStrike for alleged misleading statements regarding software testing.
Details of the CrowdStrike Incident and Its Aftermath
The CrowdStrike crisis began with a faulty software update that crashed over 8 million Windows computers. This incident not only disrupted flights but also affected banking systems and office operations. Investors are now seeking compensation for their losses, claiming that CrowdStrike misled them about the reliability of its software.
- 8 million computers affected globally.
- Shareholders filed a class action lawsuit.
- Delta Airlines canceled 7,000 flights.
- Potential lawsuits against Microsoft are also in play.
Future Implications for NYSTRS and Its Investment Strategy
The NYSTRS is legally required to ensure a minimum annual return of 6.95%. This recent loss could impact its ability to meet this obligation, potentially leading to financial repercussions for the state. The fund’s spokesperson has declined to comment on specific stock holdings, emphasizing the challenges of navigating volatile investments.
For more information on the NYSTRS and its investment strategies, visit NYSTRS Official Site.
