Klarna Faces Class Action Lawsuit Over IPO Misstatements
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 11h ago
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Source: Globenewswire
- Class Action Initiated: Bragar Eagel & Squire has filed a class action lawsuit against Klarna in the U.S. District Court for the Eastern District of New York on behalf of investors who purchased shares during the September 10, 2025 IPO, indicating significant investor dissatisfaction with the company's financial transparency.
- Misstatement Allegations: The lawsuit alleges that Klarna's IPO registration statement failed to disclose the material risk of rising loss reserves, resulting in investor losses when the true information became public, highlighting significant deficiencies in the company's risk management practices.
- Stock Price Impact: Following the disappointing Q3 2025 financial results released on November 18, 2025, which revealed a substantial increase in credit loss provisions, Klarna's stock price fell from $34.88 to $31.63, a decline of approximately 9.3%, reflecting market concerns over its financial health.
- Investor Rights Protection: Investors must apply by February 20, 2026, to be appointed as lead plaintiffs in the lawsuit, demonstrating a focus on corporate governance and transparency that could impact future investor confidence and market performance.
Analyst Views on KLAR
Wall Street analysts forecast KLAR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KLAR is 47.53 USD with a low forecast of 39.00 USD and a high forecast of 55.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
13 Buy
3 Hold
0 Sell
Strong Buy
Current: 30.730
Low
39.00
Averages
47.53
High
55.00
Current: 30.730
Low
39.00
Averages
47.53
High
55.00
About KLAR
Klarna Group Plc is a United Kingdom-based technology company focused on developing commerce networks. The Company is an artificial intelligence (AI)-powered global payments network and shopping assistant. It provides consumers and merchants with a range of solutions, including payment, advertising and digital retail banking, through several channels. Its online payments solution is designed to bridge uncertainty in the transactions between consumers and merchants by providing short-term credit to consumers interest-free. Its range of payment options allows consumers to purchase what they choose, both online and offline. Its payment solutions include Pay in Full, Pay Later and Fair Financing. Its Pay in Full instantly settles purchases at the time of the transaction. Its Pay Later enables consumers to purchase goods or services at the time of the transaction and pay the full amount at a later date. Its Fair Financing allows consumers to pay for their purchase over a longer duration.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
