Shares of BigBear.ai Holdings (BBAI) plummeted 15.76% in Tuesday's trading session following the artificial intelligence software provider's announcement of significant accounting issues. The company revealed it would need to restate several years of financial statements and delay filing its annual report for 2024, raising concerns among investors about its financial reporting and accountability.

BigBear.ai disclosed that it will restate its audited consolidated financial statements for the fiscal years ended December 31, 2022, and 2023, as well as interim financial statements for each quarterly period in 2023 and 2024. The restatement is attributed to a change in the interpretation and application of accounting guidance, particularly related to the accounting presentation of convertible debt due in 2026. Despite assurances that these changes are not expected to impact revenues, gross margin, adjusted EBITDA, or operating cash flows in any prior period, investors reacted negatively to the news.

Adding to the company's woes, BigBear.ai expects to report a significant increase in its pre-tax loss, projecting $296.1 million for 2024 compared to $71.3 million in 2023. This substantial widening of losses, combined with the need for financial restatements, has likely contributed to the sharp decline in stock price. The plunge comes on top of an already challenging period for BigBear.ai, whose stock has dropped 59% in the past month amid a broader selloff in highly valued AI stocks. As the company works to address these accounting issues and file its delayed annual report, investors will be closely monitoring the situation for any further developments that could impact BigBear.ai's financial standing and market position.