New York, Jan 12, 2026, 10:18 (ET) — Regular session
- Klarna shares dropped roughly 4.8%, slipping to $29.96 in early trading after wrapping up Friday at $31.45.
- Trump’s plan to cap credit-card interest rates at 10% for one year is sending shockwaves through consumer finance stocks.
- Investors are keeping an eye on the Feb. 20 deadline for lead plaintiffs in a securities class action linked to an IPO.
Klarna Group plc shares dropped 4.8% to $29.96 in early Monday trading, down from an opening price of $32.33, as investors digested new policy risks tied to U.S. consumer lending and increased legal scrutiny on the recently listed fintech. (Investing)
The shift follows U.S. President Donald Trump’s proposal to cap credit-card interest rates at 10% for one year beginning Jan. 20. Wall Street experts warned that such a wide-ranging cap would almost certainly need Congress approval, with slim chances of making it through. Still, the announcement rattled stocks in lenders and payment companies. (Reuters)
A rate cap would slice into one of consumer banking’s most lucrative areas, reshaping who receives credit and under what conditions. Credit card rates currently average around 19.65%, with outstanding balances hitting $1.23 trillion by the end of Q3, according to Bankrate and Federal Reserve figures cited by Reuters. Imposing a cap might steer more borrowers toward alternatives like buy now, pay later plans — short-term installment loans offered at checkout. (Reuters)
U.S. financial stocks took a broad hit Monday, though some alternative lending firms fared better. Brian Jacobsen, chief economic strategist at Annex Wealth Management, noted, “When companies can’t price the risk properly, they’ll just reduce credit lines or cut off access to credit entirely. Buy now pay later firms and payday lenders might love this proposal.” Investors will be watching bank earnings reports this week closely for clues on how lenders intend to react. (Reuters)
Klarna CEO Sebastian Siemiatkowski threw his support behind the rate-cap proposal, saying the current setup favors wealthier consumers while others face high interest charges. “It’s not a fair system,” Siemiatkowski told The Times. (The Times)
Litigation news has weighed heavily on the stock. Faruqi & Faruqi announced Sunday night that investors have until Feb. 20 to apply to be lead plaintiff in a federal securities class action linked to Klarna’s September 2025 IPO. The lawsuit claims the company and certain executives made misleading statements or left out risks around rising loss reserves. (TMX Newsfile)
Klarna, the Swedish payments company famous for its BNPL service, went public in New York last September, pricing its shares at $40 each. The stock surged on its first day, according to Reuters. But as of Monday, the shares have fallen sharply, trading well under the IPO price. (Reuters)
Credit quality continues to challenge investors. Klarna’s debut earnings as a public company in November revealed revenue growth that surpassed forecasts, yet higher credit loss provisions dragged the shares down, Reuters noted. (Reuters)
But the policy headline remains just that — a headline. Without congressional action, the cap might disappear, triggering a swift market reversal. Klarna’s bigger short-term threat is tighter bank credit, which could drive more weak borrowers to BNPL, boosting volumes but also sparking higher defaults and funding costs.
