#United States #San Francisco #SEC #Hagens Berman #Kyndryl Holdings

Kyndryl Holdings in Hot Water Following Major Share Price Decline

On February 9, 2026, shares of Kyndryl Holdings, Inc. (NYSE: KD) plummeted by almost 57%, raising significant concerns among investors and prompting a national shareholder rights law firm, Hagens Berman, to launch an investigation into the company’s financial practices. The investigation comes on the heels of alarming announcements by Kyndryl regarding its financial reporting and management changes, which have shaken investor confidence dramatically.

Kyndryl, an infrastructure services provider, had previously communicated robust financial performance metrics to investors, particularly emphasizing the effective conversion of earnings into free cash flow. However, the recent disclosures have put those assurances into serious question. On February 9, the company revealed that it would not be able to file its quarterly report for the period ending December 31, 2025, due to a review initiated by its Audit Committee.

This review was said to focus on the company's cash management practices, disclosures related to its free cash flow metric, and the adequacy of its internal controls over financial reporting. Such revelations naturally alarmed investors, leading to the drastic sell-off of Kyndryl shares, erasing over $3 billion from the company's market capitalization.

In addition to the filing delays, Kyndryl disclosed that it had received requests for documents from the Securities and Exchange Commission (SEC) as part of an investigation concerning the issues raised by the Audit Committee's review. This public acknowledgment of regulatory scrutiny has further intensified the concerns surrounding Kyndryl's financial practices and transparency.

Furthermore, the sudden departure of key executives, including the Chief Financial Officer, David Wyshner, and General Counsel, Edward Sebold, has compounded the uncertainty. Both left their positions on February 5, which raises questions about the company's internal governance and decision-making processes, further alarming investors and stakeholders alike.

Reed Kathrein, a partner at Hagens Berman, articulated the essence of the investigation, stating, “We're questioning whether Kyndryl, having consistently promoted the growth of its free cash flow, may have misled investors regarding the legitimacy of its cash management practices, especially in an industry where free cash flow is highly scrutinized.” This scrutiny indicates that Kyndryl's commitment to transparency and adherence to regulatory requirements may be under significant doubt.

The law firm is reaching out to investors who might have incurred substantial losses due to the share price decline, urging them to discuss their potential claims. Hagens Berman emphasizes the importance of investor rights, encouraging those who believe they have been misled or have relevant information to contribute to reach out. Notably, whistleblowers with insider knowledge about Kyndryl's practices might find pathways to report their information under SEC regulations, potentially leading to substantial rewards for original information that assists in any claims made.

Hagens Berman has built a substantial track record advocating for corporate accountability, having successfully secured over $2.9 billion for various stakeholders impacted by corporate misconduct. Investors who are concerned about their standing with Kyndryl are advised to monitor developments closely, as the situation continues to evolve.

In summary, Kyndryl Holdings is navigating a significant crisis that not only threatens its financial stability but also puts its future as a publicly traded company at risk. As investigators delve into the company’s practices, the unfolding developments will undoubtedly serve as critical lessons in corporate governance and investor vigilance.