12:13 PM EDT, 03/27/2025 (MT Newswires) -- (Updates with statement from a Kyndryl ( KD ) spokesperson in the fifth and sixth paragraphs.)

Kyndryl ( KD ) shares declined about 11% in recent Thursday trading after short-seller Gotham City Research alleged that the company manipulates adjusted earnings before interest, taxes, depreciation and amortization and adjusted free cash flow.

Gotham City claimed the manipulation aims to make it appear that the company generates profits and cash flow. "In reality, [Kyndryl ( KD )] generates losses and burns cash," the short seller said.

Gotham City added that the company's earnings will be pressured "far below" consensus for 2025 and 2026 amid "higher incremental" IBM (IBM) cost of services.

As a result, Gotham City alleged Kyndryl's ( KD ) shares are worth between $4.71-$11.50 and $0 per share, or 67% to 100% below its current levels.

A Kyndryl ( KD ) spokesperson said the company's accounting and disclosures are correct and accurate, and called the report "inaccurate and deliberately misleading."

"Kyndryl ( KD ) rejects in the strongest possible terms the conclusions reached within the report, which was clearly designed to manipulate the company's stock for the short seller's benefit," the spokesperson said in a statement emailed to MT Newswires. "Kyndryl ( KD ) has never spoken to this firm, and had we been afforded the opportunity to do so, we would have pointed out the many inaccuracies and falsehoods contained in this so-called analysis."

Price: 30.16, Change: -3.90, Percent Change: -11.45