Faruqi & Faruqi Investigates Klarna Investor Losses After IPO

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Faruqi & Faruqi, LLP, a national securities law firm, is investigating potential claims against Klarna Group plc (NYSE: KLAR) on behalf of investors who purchased or acquired securities in the company pursuant to its September 2025 initial public offering. The firm is reminding investors of the February 20, 2026 deadline to seek the role of lead plaintiff in a federal securities class action lawsuit filed against the company.

Why it matters

The lawsuit alleges that Klarna and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that the company materially understated the risk that its loan loss reserves would increase significantly shortly after the IPO, which they either knew or should have known given the risk profile of Klarna's buy now, pay later loans. This led to the company's public statements being materially false and misleading.

The details

The lawsuit was filed after Klarna reported record revenue but also set aside more provisions for credit losses in its first earnings report since going public. The company said provisions represented 0.72% of gross merchandise volume, up from 0.44% a year ago, and provisions for loan losses came in at $235 million, above analyst estimates. On this news, Klarna's stock fell 9.3% on November 18, 2025.

• Klarna went public in September 2025.
• Klarna reported its Q3 2025 earnings on November 18, 2025.

What they’re saying

What’s next

The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.