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In a recently published report titled “Kyndryl – Like the old IBM, except with an Undisclosed Cost Problem: Part I,” Gotham City Research says that Kyndryl (KD) “manipulates” reported adjusted EBITDA plus adjusted free cash flow to artificially give the appearance that it generates profits and cash flow. “In reality, KD generates losses and burns cash.” Gotham City also believes Kyndryl faces higher incremental IBM (IBM) cost of services, which will pressure earnings far below consensus, for 2025 and 2026. “As a result of the issues identified in this report, we believe shares are worth between $4.71-$11.50 and $0.00 per share, implying 67%-100% downside to current levels,” the report reads. In pre-market trading, shares of Kyndryl have fallen over 15% to $28.91.
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