Kyndryl Stock Continues Slide Despite Wall Street’s Backing After Short-Seller Report – Retail Remains Bullish

Kyndryl Holdings (KD) shares continued declining on Friday after a report by short-seller Gotham City Research raised concerns over the company’s financials, ignoring Wall Street analysts’ support. 

Major brokerages reiterated their bullish stance on the stock, citing confidence in Kyndryl’s fundamentals, as reported by TheFly.

On Thursday, Kyndryl responded to the short seller’s allegations, calling the report “inaccurate and deliberately misleading.” 

The company said in a statement, “Kyndryl rejects in the strongest possible terms the conclusion reached within the report, which was clearly designed to manipulate the company's stock for the short seller's benefit.” 

Kyndryl also defended its accounting practices, asserting that they fully comply with reporting requirements.

However, short-seller Gotham City Research responded, stating that Kyndryl’s comments were a “generic corporate response” that failed to address specific concerns outlined in the report.

JPMorgan dismissed the report’s claim that Kyndryl faces an additional $1 billion to $2 billion in incremental costs from International Business Machines (IBM), calling the estimate exaggerated. 

The brokerage said the report “doesn’t dent” its ‘Overweight’ rating, maintaining a $45 price target and pointing to Kyndryl’s strong visibility into near-term revenue trends.

Bank of America (BofA) noted that while Kyndryl could improve transparency, investors already understood the issues raised in the short report. 

The brokerage said the market “overreacted” to the report and reaffirmed its ‘Buy’ rating with a $44 price target, citing confidence in the company’s turnaround strategy.

Oppenheimer said it spoke directly with Kyndryl management and found no "smoking gun" in the short report's allegations, which included accounting manipulation, inflated earnings before interest, taxes, depreciation, and amortization (EBITDA), and rising IBM costs. 

The brokerage sees the stock’s weakness as a buying opportunity and reaffirmed an ‘Outperform’ rating with a $43 price target.

Kyndryl retail sentiment and message volume on March 28 as of 12:05 p.m. ET | Source: Stocktwits

Retail sentiment on Stocktwits edged lower but remained within ‘extremely bullish’ territory, accompanied by ‘extremely high’ levels of chatter.

Some traders questioned Kyndryl’s response, with one user saying they don’t “love” the company’s statement. 

Others saw the stock’s decline as a chance to buy.

Kyndryl’s stock is down 8% in 2025 but has gained 47% over the past 12 months.

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