Klarna Faces Class Action Post-IPO as Losses Exceed 20%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Source: PRnewswire
- Class Action Initiated: A securities class action has been filed against Klarna Group plc in the Eastern District of New York, representing investors who purchased securities during the September 2025 IPO, highlighting significant investor dissatisfaction regarding the company's transparency.
- IPO Document Controversy: The lawsuit alleges that Klarna materially understated credit risks in its offering documents, particularly concerning financially unsophisticated clients, leading to substantial investor losses post-IPO and reflecting inadequacies in the company's risk disclosures.
- Significant Financial Losses: Klarna reported a staggering 102% year-over-year increase in credit loss provisions in its Q3 2025 results, alongside a notable rise in operating losses, causing its stock price to plummet 20% to $31.63 on November 18, 2025, significantly below the IPO price.
- Potential Legal Consequences: Hagens Berman is investigating whether Klarna's IPO documents violated federal securities laws, and if substantiated, this could severely impact the company's future financing capabilities and market trust.
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: 29.050
Low
39.00
Averages
47.53
High
55.00
Current: 29.050
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.
