KD Stock Collapses 55% on Delayed Earnings and SEC Probe
Kyndryl Holdings (NYSE: KD) shares lost more than half their value on February 9, 2026, after the IT services provider revealed significant internal turmoil. The stock plummeted 55%, or $12.90 per share, to close at $10.59, down from $23.49 the previous day. The sell-off was triggered by the company's announcement that it would delay its fiscal third-quarter 2026 financial statements, which were due for release.
Kyndryl attributed the delay to an internal accounting review focused on its cash management practices and the calculation of its adjusted free cash flow metric. The review was initiated after the company received document requests from the U.S. Securities and Exchange Commission (SEC). Concurrent with this disclosure, Kyndryl announced the immediate departures of its Chief Financial Officer and General Counsel, signaling deep-seated issues within its financial governance.
Fraud Lawsuits Allege Misstated Financials Since August 2024
In the wake of the stock's collapse, several law firms, including Bleichmar Fonti & Auld LLP and Rosen Law Firm, filed class-action lawsuits against Kyndryl and its senior executives. The suits, filed in the U.S. District Court for the Eastern District of New York, allege that the company made false and misleading statements to investors and failed to disclose critical information about its financial health.
The complaints specifically claim that Kyndryl misrepresented its financial statements and had inadequate internal controls between August 7, 2024, and February 9, 2026. According to the filings, the company materially understated problems with its internal controls for fiscal year 2025 and the first three quarters of fiscal year 2026. Investors who purchased securities during this period have until April 13, 2026, to file a motion to serve as lead plaintiff in the case.
