Klarna's NYSE Listing Faces Scrutiny Amid Investor Lawsuit

2026-01-10 companies

New York, Saturday, 10 January 2026.
Trading under KLAR, the fintech giant faces a class-action lawsuit alleging undisclosed risks after credit loss provisions spiked 102% just weeks following its September public debut.

Legal Challenges Mount

The legal scrutiny centers on Klarna’s fiscal disclosures following its initial public offering in September 2025. National shareholder rights litigation firm Hagens Berman has notified investors of a February 20, 2026, deadline to petition the court for lead plaintiff status in a pending securities class action [6]. The complaint alleges that the company’s offering documents failed to adequately disclose credit risks and the potential for a surge in loss reserves [6]. These concerns materialized on November 18, 2025, when the company reported a 102% year-over-year increase in its provision for credit losses for the third quarter of 2025 [6]. Following this disclosure, the stock price experienced a significant decline, trading nearly 22% below its IPO price as the market reacted to the sudden shift in financial risk metrics [6].

IPO Volatility and Market Valuation

Klarna’s entry into the public markets has been marked by volatility since its debut on September 10, 2025 [5]. The company initially raised approximately $1.4 billion by issuing over 34 million shares at a price of $40.00 per share [5]. However, as of the close on January 9, 2026, the stock was trading at $31.45, representing a decline of -21.375% from its offering price [2][5]. This valuation places the company’s market capitalization at approximately $11.87 billion, a figure that stands in stark contrast to its peak private valuation of $45.6 billion in 2021 [2][3]. The path to listing was also complicated by macroeconomic factors; the company had originally planned for an April 2025 filing but delayed the move due to market volatility stemming from tariff uncertainties under the Trump administration [3].

Financial Realities and Strategic Pivots

Beyond the courtroom, Klarna is navigating a complex financial landscape as it transitions from a dedicated ‘Buy Now, Pay Later’ provider to a broader digital banking entity [7]. While the company generated $3.208 billion in revenue over the trailing twelve months, it continues to operate at a loss, reporting a net margin of -6.45% and a net loss of $224 million [2][7]. Despite these headwinds, the stock has shown some resilience early in the new year; after starting 2026 at $28.77, the share price has climbed to $31.45, an increase of 9.315% year-to-date [2][5]. Management is currently attempting to turn consumer anxiety regarding debt into a brand advantage, positioning its products as budgeting tools in contrast to traditional revolving credit [7].

Sources

Equities Fintech