Klarna Faces Securities Class Action Over IPO Loss-Reserve Disclosures

New updates have been reported about Klarna.

Klarna Group plc is at the center of a newly filed U.S. securities class action alleging that the company and certain executives, directors, authorized representatives, and IPO underwriters misled investors about credit risk and loss reserves ahead of its September 10, 2025 initial public offering on the NYSE. The lawsuit, brought in the Eastern District of New York under the caption Nayak v. Klarna Group plc, contends that Klarna’s IPO documents failed to adequately disclose the likelihood that loan-loss provisions would rise materially within months of the offering, given the credit risk profile associated with its buy now, pay later portfolio. Klarna raised capital by selling roughly 34 million shares at $40 per share, but by the time the suit was filed, the stock had fallen to about $31.31, reflecting investor concern over mounting credit costs and raising questions about the robustness of its risk modeling and disclosures at the time of listing.

The complaint cites a November 18, 2025 Bloomberg report as a key inflection point, highlighting that Klarna posted a net loss of $95 million as it significantly increased provisions for potentially deteriorating loans. According to that report, provisions reached 0.72% of gross merchandise volume, up from 0.44% a year earlier, and totaled $235 million, exceeding analyst expectations of $215.8 million and signaling rising stress in Klarna’s loan book as it extended longer-duration products. Under the Private Securities Litigation Reform Act, any investor who bought Klarna shares in or traceable to the IPO can seek appointment as lead plaintiff by February 20, 2026, potentially shaping litigation strategy, settlement posture, and governance-related demands. For executives and investors, the case elevates litigation, regulatory, and reputational risk around Klarna’s growth model, particularly its credit underwriting and reserve policies, and may influence future disclosure standards and capital-market access for Klarna and the broader BNPL sector.