Kyndryl Holdings Inc. (KD) shares plummeted 56.88% during intraday trading on Monday, following a series of alarming disclosures regarding its financial reporting practices and leadership.

The IT services provider, spun off from IBM in 2021, announced it is delaying the filing of its quarterly report as its audit committee reviews cash-management practices and internal controls. This review was initiated after the company received voluntary document requests from the U.S. Securities and Exchange Commission's Division of Enforcement. Kyndryl stated it anticipates reporting "material weaknesses" in its internal control over financial reporting for multiple periods, including the full fiscal year ended March 2025 and the first quarters of fiscal 2026. The company further advised that its annual report for fiscal 2025 should no longer be relied upon.

Concurrently, Kyndryl reported the departure of its Chief Financial Officer David Wyshner and General Counsel Edward Sebold. Harsh Chugh was appointed as interim CFO. The company also slashed its fiscal 2026 outlook, now expecting constant-currency revenue to decline 2% to 3%, compared to a prior forecast of 1% growth. Its third-quarter results, released alongside these announcements, missed analyst estimates for both adjusted earnings and revenue.