Klarna Crashes Below IPO as Rivals Soar--What Just Happened?

Klarna Group's KLAR debut excitement is already giving way to market reality. Just two weeks after one of the most talked-about IPOs of the year, the stock fell as much as 7.7% to $38.31, slipping under its $40 listing price. Klarna raised $1.58 billion in a heavily oversubscribed offering on Sept. 10, but its pullback now comes at the same moment a record tech rally has lost momentum. Stronger-than-expected US economic data has tempered expectations for further Federal Reserve rate cuts, a shift that could weigh on growth-oriented firms dependent on cheaper capital.

Bloomberg Intelligence analyst Diksha Gera noted that fintech valuations are particularly exposed to rate trends and regulatory shifts. Klarna's IPO was priced at the high end, leaving little margin if yields rise or monetary easing slows. That dynamic has also pressured Affirm Holdings and Block, both of which extended multi-day declines. At the same time, rivals that have stayed private are posting richer valuationsStripe at $106.7 billion, Revolut aiming for $75 billion, and Checkout.com securing $12 billion in a fresh staff tender. The contrast highlights the tougher environment for public fintechs, even as private competitors attract higher marks.

Since its debut, Klarna has shed nearly 15% from its first closing price, underperforming the S&P 500's modest gain over the same stretch. CEO Sebastian Siemiatkowski now faces pressure not only from macro headwinds but also from intensifying competition, underscored by Chairman Michael Moritz's comment on IPO day that the firm was 10 years behind Revolut. Klarna has been expanding its fair financing longer-term installment product, which has boosted net interest income but forced higher provisions for potential credit losses. The mix of rate uncertainty, competitive heat, and richer private market benchmarks is now testing investor conviction in Klarna's public-market story.