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Klarna stock sinks 25% after bad loan costs soar

Financial Times
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Swedish fintech Klarna’s stock plunged 25% after reporting surging loan losses, worsening its decline since its September 2025 IPO. The company’s share price has dropped by two-thirds since going public, eroding investor confidence amid rising credit risks and economic uncertainty. Soaring bad loan costs—linked to higher default rates—drove the latest sell-off, exposing vulnerabilities in Klarna’s buy-now-pay-later model. Analysts warn the downturn reflects broader fintech struggles as inflation and tighter monetary policies squeeze consumer spending and repayment capacity. Klarna’s leadership faces pressure to stabilize operations, with investors questioning its long-term viability amid mounting financial and regulatory challenges.
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