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Published February 3, 2026
Klarna sold investors a feel-good story. Smart tech. Smarter credit. Responsible growth. But the truth hit hard.
In March 2025, Klarna filed for its long-awaited IPO, promising cutting-edge underwriting and disciplined risk controls. By September, shares priced at $40, and executives said their models could safely handle consumer lending at scale.
What investors didn’t hear was who Klarna was really lending to. The lawsuit says many borrowers were already under financial stress. Even taking out loans for fast food. Risky loans that should have raised red flags.
Then in November, the cracks showed. Klarna reported a $95 million loss and sharply higher credit loss provisions. The stock slid to about $31 dollars. Confidence vanished. Now investors say they were misled. And more shareholders are stepping forward to join the lawsuit.