Klarna Group Faces Class Action Over Alleged IPO Misstatements, 102% Loss Provision Spike
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Globenewswire
- Lawsuit Notification: Hagens Berman is notifying investors in Klarna Group plc (NYSE: KLAR) about the upcoming lead plaintiff deadline on February 20, 2026, urging those who suffered losses to contact the firm for claims submission.
- IPO Document Issues: The investigation centers on allegations that Klarna's September 2025 IPO documents misled investors by failing to disclose aggressive lending practices to financially unsophisticated consumers, which could have influenced investment decisions.
- Credit Loss Surge: Shortly after the IPO, Klarna reported a staggering 102% year-over-year increase in its provision for credit losses, raising serious questions about the transparency of its credit modeling and causing its stock to trade nearly 22% below the IPO price.
- High-Risk Loan Allegations: The lawsuit claims Klarna's growth was driven by high-frequency, high-interest loans for non-durable goods like fast food, a practice criticized for targeting financially vulnerable consumers and increasing default risk, further heightening investor concerns.
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 44.36 USD with a low forecast of 36.00 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.
11 Analyst Rating
9 Buy
2 Hold
0 Sell
Strong Buy
Current: 28.790
Low
36.00
Averages
44.36
High
55.00
Current: 28.790
Low
36.00
Averages
44.36
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.
