Daniel Yu’s Gotham City Research bassist firm has launched harsh accounting accusations against Kyndryl, as made with Grifols last year, denouncing that “manipulates” his Ebitda and cash flows. Kyndryl shares collapse up to 14%. The report ensures that the shares can assert zero.
Gotham finds a new victim in the US market. This is Kyndryl, once a division of IBM technological services that was split in 2021. The company has a stock market capitalization of 8,000 million dollars and has customers all over the world. In Spain it offers services to companies such as Telefónica, CaixaBank, Unicaja and Ohla, is even hired by the central administration.
The firm, in an extensive 43 pages report, ensures that Kyndryl “generates effective losses and burning, while hiding it by manipulating Ebitda and cash flow. And he does it with his modus operandi with a first part and promising a second. The market reaction has not been expected, the titles record decreases of 14%.
The company was officially separated from IBM in November 2021 and specializes in IT infrastructure services, it helps companies to operate and modernize their complex technological systems. IBM decided to divide in two to focus more on its higher areas, such as hybrid cloud, artificial intelligence (AI) and software services. The part of traditional infrastructure services no longer fit well with that strategy, so they separated it as a new company.
Gotham loads the inks in this relationship. “We have identified accounting and dissemination irregularities with respect to Kyndryl’s informed payments to IBM between 2019 and 2023,” says Daniel Yu’s team. IBM is still the main supplier of the company. “Kyndryl reports 1,382 million dollars as its cost of related parts services for the next 6, 9 and 12 months, just the amount paid to IBM, and seems very confusing and suspicious.” And he adds that Kyndryl “stopped informing his IBM costs since 2023, although IBM has been the largest Kyndryl supplier.”
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