Klarna’s Stock Just Dropped Below Its $40 IPO Price

Shares of Klarna Group Plc. (KLAR) fell below their initial public offering (IPO) price of $40 for the first time on Friday.

Klarna’s stock fell more than 5% by midday trade on Friday, trading at around $39.37 at the time of writing, rebounding from a low of $38.31. The shares had rallied as high as $57 on the day of their debut, following the company's $1.37 billion raise through the IPO. 

The drop comes amid a broader decline in fintech companies, with shares of Affirm Holdings (AFRM) and Jack Dorsey-backed Block Inc. (XYZ) also trading in the red. Block’s stock fell around 1.3% and Affirm’s stock dropped as much as 2.5%. On Stocktwits, retail sentiment around Klarna and Block was in ‘bearish territory while retail sentiment around Affirm improved to ‘neutral’ from the ‘bearish’ zone over the past day. 

“Fintech stocks, including Klarna, are sensitive to macroeconomic factors like interest rates and regulatory developments,” said Diksha Gera, a Bloomberg Intelligence analyst. “Although the Fed started cutting rates in 2025, any hint of slower-than-expected cuts or yields rising could pressure valuations and sentiment as higher yields can increase their borrowing costs,” she said, adding that Klarna’s IPO was priced richly to begin with.

Klarna’s stock has been on a downtrend since Tuesday, when Federal Reserve Chair Jerome Powell said that there is a “challenging situation” facing the central bank as it tries to balance both sides of its dual mandate of stable prices and maximum employment. 

“Two-sided risks mean that there is no risk-free path,” Powell stated. He also remarked that equity prices were “fairly highly valued.” The rally that had driven stocks higher after the Fed announced its first rate cut of the year appears to have faded since. 

Klarna’s stock has retreated nearly 15% from its closing price on its listing debut, even as the broader S&P 500 Index has risen about 1.3% over the same time.

Read also: PCE Report: Core Inflation Holds Steady At 2.9% In August

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on