TLDR
- Kyndryl (KD) stock crashed 53% to $11.05 after announcing delayed quarterly filing due to financial control failures
- Internal accounting weaknesses discovered spanning all of fiscal 2025 and first two quarters of fiscal 2026
- CFO David Wyshner and Global Controller Vineet Khurana both exited, with interim replacements installed
- Fiscal 2026 revenue guidance cut to -2% to -3% decline as sales cycles stretch longer than expected
- Stock hit 52-week low of $10.82, now down 46% over past year before Monday’s collapse
Kyndryl stock got obliterated Monday, cratering 53% to $11.05 in one of the worst single-day performances in recent tech sector history. The IT services provider stunned investors with a triple threat of bad news.
First, the company won’t file its December quarter report on schedule. Second, material weaknesses in financial controls have been identified. Third, top financial executives are out.
The accounting problems run deep. Material weaknesses extend throughout fiscal year 2025 and into the first half of fiscal 2026.
Kyndryl attempted damage control by stating the issues won’t impact financial statements. No changes expected to balance sheets, income statements, or cash flows.
Investors dumped shares anyway.
Top Financial Executives Head for the Exit
CFO David Wyshner left the building, effective immediately. The sudden departure raised immediate red flags across Wall Street.
Harsh Chugh jumped into the interim CFO seat. He currently runs global corporate development and administration. His previous role as Chief Operating Officer gives him some operational background.
The exits didn’t stop with the CFO. Global Controller Vineet Khurana stepped down too.
Bhavna Doegar moved up from senior vice president of Finance and Strategy to interim corporate controller. Two critical finance positions now filled by interim leaders.
Kyndryl declined to say whether these departures linked to the accounting review. The silence said everything.
Sales Cycles Stretch, Revenue Projections Sink
Third quarter results arrived with slashed guidance. The company now projects fiscal 2026 revenue will drop 2% to 3% on a constant currency basis.
Management blamed elongated sales cycles for the miss. Kyndryl Consult, previously a bright spot in the portfolio, saw deal closures drag out longer than anticipated.
Old IBM contracts continue creating problems. These pre-spinoff legacy deals keep weighing on overall performance.
Oppenheimer didn’t waste time reacting. Analyst Ian Zaffino downgraded the stock from Outperform to Perform. He stripped away his price target entirely, citing the business shift and increased uncertainty.
The stock bottomed at $10.82 during Monday trading, marking a fresh 52-week low. Prior to this disaster, shares had already shed 46% over 12 months.
Current metrics show a P/E ratio of 13.91 and beta of 1.93, indicating high volatility. Gross margins sit at 21.4%, below industry standards.
The company now faces months of uncertainty while sorting through accounting issues and searching for permanent financial leadership to replace the interim team.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
