Klarna Group Faces Class Action Post-IPO, 20% Share Price Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
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Source: Globenewswire
- 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 with the company's transparency.
- IPO Document Controversy: The lawsuit alleges that Klarna materially understated credit risks in its offering documents, particularly regarding financially unsophisticated clients, resulting in substantial losses for investors post-IPO and reflecting the company's shortcomings in risk disclosure.
- Financial Loss Exposure: Klarna reported a staggering 102% year-over-year increase in credit loss provisions and significant operating losses in its Q3 2025 results released on November 18, leading to a sharp 20% drop in share price to $31.63 on that day.
- Potential Legal Consequences: Hagens Berman emphasizes that transparency is a core issue in IPOs, and Klarna's spike in credit loss provisions may indicate that risks had already materialized by the time of the IPO, prompting investors to monitor ongoing legal developments to safeguard their rights.
KLAR
$30.42+Infinity%1D
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: 30.640
Low
39.00
Averages
47.53
High
55.00
Current: 30.640
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.
