By Paul R. La Monica

Klarna stock surged more than 10% on Friday after word that the chairman of Swedish fintech Klarna is buying shares. But the question is: Buy Now, Pay Later?

The stock pop is unarguably good for Klarna, a buy now, pay later lender. It has been a disaster since it made its Wall Street debut six months ago, losing 60% from its initial public offering price.

Not even three months into the year, the stock is down almost 45%, despite Friday's 10.5% gain from the insider buy. Chairman Michael Moritz bought nearly 3.5 million shares worth just under $50 million from March 3-11, according to a government filing.

Mortiz's big purchase could allay worries that other insiders want to dump shares now that the six-month lock-up period for selling the stock expired this week. Shares plummeted 11% on Thursday, for instance.

Still, that's cold comfort because the health of the business is at the heart of Klarna's struggle. Credit quality is a big worry since Klarna, and its competitors, let shoppers pay for goods online in small installments -- often without credit checks and at 0% interest.

To some, there are similarities to the subprime lending fisaco that triggered the 2007-09 financial crisis.

Klarna's earnings report last month is an example. The quarterly numbers were decent on the top line, with revenue surpassing $1 billion, but guidance was weak and loan loss provisions rose.

Adding to the angst on Wall Street is the overall crummy performance of the BNPL business.

Affirm has plummeted 36% this year, and PayPal, which also has a BNPL business, is down nearly 25% this year and ousted its CEO a month ago. Block, which owns Afterpay, was down as much as 25% at one point this year but clawed back some losses after the company announced massive layoff plans a couple of weeks ago.

For Klarna, the Mortiz buy could improve investor sentiment and put a floor on the stock. Analysts are still bullish. Of the 19 who cover Klarna, 14 rate the stock Buy. The others rate it Hold. The average price target is $21.65, 34% above current levels.

Klarna is trading at a reasonable valuation of just 20 times earnings estimates for 2027. A heads-up, though: Analysts have also steadily slashed their forecasts as the company's financial situation has deteriorated.

Wall Street is now predicting that Klarna will earn 81 cents a share in 2027, down 30% from forecasts of $1.16 in January according to FactSet.

OK, there are a lot of things to consider -- some conflicting. So our takeaway: Don't be blinded the Moritz buy. Beware if you buy now. You just might pay later.

Write to Paul R. La Monica at paul.lamonica@barrons.com

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March 13, 2026 13:21 ET (17:21 GMT)

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