Klarna IPO’d in September 2025 at $40 per share. Six months later, on February 20, 2026, the stock closed at $13.09, down 25% in a single session. The company had just reported $1 billion in quarterly revenue for the first time in its history.

The market is not mispricing Klarna because it is dumb. It is mispricing Klarna because it is using the wrong mental model. The consensus frame is that Klarna is a capital-light fintech that briefly turned into a bank by mistake. My view is the reverse: Klarna is a bank wearing a fintech costume, and that is where the opportunity and the risk both sit.