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Why Kyndryl Holdings Stock Is Down Big Today
Kyndryl Holdings (NYSE: KD) is the target of a report from a short-seller that accuses the IT infrastructure company of manipulating financial metrics. Investors are heading for the exits, sending shares of Kyndryl down as much as 15% on Thursday morning and 11% as of 12:00 p.m. ET.Kyndryl is a data center business that was spun out of IBM in 2021. The stock has been a big winner over the past three years, but according to a new short report, not all is as it seems inside the company.Gotham City Research, which is short Kyndryl shares, put out a report alleging that Kyndryl has artificially inflated its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and free-cash-flow figures, masking what Gotham sees as significant cash burn. The report is also critical of Kyndryl's disclosures when it comes to its relationship with its former parent and predicted the company will encounter higher costs for IBM services in the years to come.Continue reading
Kyndryl Holdings (NYSE: KD) is the target of a report from a short-seller that accuses the IT infrastructure company of manipulating financial metrics. Investors are heading for the exits, sending shares of Kyndryl down as much as 15% on Thursday morning and 11% as of 12:00 p.m. ET.
Kyndryl is a data center business that was spun out of IBM in 2021. The stock has been a big winner over the past three years, but according to a new short report, not all is as it seems inside the company.
Gotham City Research, which is short Kyndryl shares, put out a report alleging that Kyndryl has artificially inflated its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and free-cash-flow figures, masking what Gotham sees as significant cash burn. The report is also critical of Kyndryl's disclosures when it comes to its relationship with its former parent and predicted the company will encounter higher costs for IBM services in the years to come.
