What Happened?
Shares of IT infrastructure services provider Kyndryl (NYSE: KD) fell 56.1% in the afternoon session after the company reported weak fourth quarter earnings. Its EPS missed, and its revenue fell slightly short of Wall Street's estimates.
Adding to the weakness, the company noted that it could not file its quarterly report on time due to an ongoing investigation by the Securities and Exchange Commission into its cash management and financial disclosures. This announcement was immediately followed by the resignations of both the Chief Financial Officer and the General Counsel.
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What Is The Market Telling Us
Kyndryl’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Kyndryl and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 5.7% on the news that the major indices rebounded from a week of heavy selling. This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.
Kyndryl is down 58.7% since the beginning of the year, and at $10.52 per share, it is trading 75.8% below its 52-week high of $43.41 from July 2025. Investors who bought $1,000 worth of Kyndryl’s shares at the IPO in October 2021 would now be looking at an investment worth $258.16.
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