Why BigBear.ai Stock Is Plummeting Today

BigBear.ai (NYSE: BBAI) stock is getting hit with big sell-offs Tuesday following news that the company will delay a key financial filing. The software company's share price was down 11.6% as of 11:45 a.m. ET. The stock had been down as much as 18.1% earlier in trading.

BigBear.ai submitted a filing to the Securities and Exchange Commission (SEC) today stating that it would not the normal filing deadline for its annual 10-K report. The company said that it will need to restate previously reported results, and investors are dumping the stock in response.

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BigBear.ai stock sinks on news of accounting issues

In its filing with the SEC today, BigBear.ai said that it will need to go back and restate financial results for its 2022 and 2023 fiscal years. The company will also need to restate individual quarterly results for 2023 and 2024. The need to restate accounting related to convertible notes that are scheduled to mature in 2026. The embedded conversion option was not originally accounted for as a derivative from the 2026 notes, and this issue will need to be corrected in refilings.

BigBear.ai has seen a dramatic pullback

BigBear.ai stock has been highly volatile over the last year. The company's share price is still up roughly 26% over the last 12 months, but it's down 68.5% from its peak across the stretch.

The software specialist had seen big valuation gains in conjunction with excitement surrounding artificial intelligence (AI), President Trump's election win, and the appointment of Kevin McAleenan as its new CEO. Meme-stock momentum had also helped power a rally for the company's share price, but it's given up most of its gains as investors have become more risk-averse and taken a more bearish stance on the company's outlook.

Investors were already raising concerns about BigBear.ai's financing moves and path to profitability, and the need to restate previously issued results is creating increase selling pressure.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.