Klarna Group Faces Class Action Over Misleading IPO Statements
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10h ago
0mins
Source: Globenewswire
- Class Action Initiation: Hagens Berman is notifying investors of a class action against Klarna for alleged misstatements in its September 2025 IPO documents, with a lead plaintiff deadline set for February 20, 2026, highlighting significant investor concerns regarding corporate transparency.
- Understated Credit Risks: The lawsuit claims that Klarna's IPO registration statement and prospectus failed to adequately disclose critical flaws in its credit modeling and risk management, particularly underestimating risks associated with lending to financially distressed clients, potentially exposing investors to significant losses.
- Surge in Loss Reserves: Klarna reported a staggering 102% year-over-year increase in credit loss provisions on November 18, 2025, which directly contributed to its stock price plummeting nearly 22% below its IPO price, reflecting market apprehension about its financial health.
- Potential Legal Consequences: Hagens Berman's investigation suggests that if known credit risks were omitted from the IPO documents, it could have serious implications for Klarna's legal liability, emphasizing investors' rights to be informed about such risks to safeguard their interests.
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.
