CrowdStrike Stock Plummets Over 11% in 2025 After Global Outage — Shorts Profit $373M
In 2025, CrowdStrike's stock crashed following a faulty update causing a worldwide Microsoft Windows outage, leading to massive gains for short sellers. Discover the full impact and market reaction.
Key Insights
- Short sellers capitalized on CrowdStrike's faulty update that triggered a global outage impacting Microsoft Windows systems.
- The incident caused an 11%+ drop in CrowdStrike’s stock price on Friday.
- S3 Partners reports that shorts on CrowdStrike earned over $373 million in mid-day mark-to-market profits from this event.
On Friday, CrowdStrike (CRWD) shorts earned upwards of $373 million after the cybersecurity firm's defective update led to a widespread IT outage affecting Microsoft (MSFT) Windows hosts, according to S3 Partners research.
The outage caused a sharp decline in CrowdStrike shares, closing down more than 11% by day’s end.
S3 Partners highlighted that CrowdStrike shorts were the biggest beneficiaries, with mid-day mark-to-market profits exceeding $373 million. Microsoft shorts also saw gains of around $126 million, while the broader software systems sector shorts collectively netted $414 million in one-day mark-to-market profits.
The analysis revealed $48 billion in short interest within the systems software sector, with Microsoft representing over half of that exposure, followed by CrowdStrike. Experts anticipate ongoing short selling pressure in this space.
CrowdStrike CEO George Kurtz confirmed the company identified the outage's root cause and implemented a fix promptly.
Meanwhile, Microsoft shares dipped less than 1% on the same day.
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