KLAR enters September with a striking split: the CEO is buying shares in the open market while short sellers tighten their grip and the borrow pool approaches empty.
The most newsworthy development this week is the insider. On August 26, CEO Sebastian Siemiatkowski purchased 692,506 shares at $14.37 each — a $9.95 million open-market buy, filed directly with the SEC under Form 4 and not made under a pre-arranged 10b5-1 plan. That matters. A discretionary purchase at this scale, from the company's founder and chief executive, during a month when the stock fell 25%, is a direct statement of conviction. His total reported holding now stands at roughly 25.3 million shares, or 6.7% of shares outstanding. The trade did not stop the stock from slipping a further 3% on September 1 to $14.25, but it has not been followed by any other insider selling.
The lending market has moved from tight to nearly shut. Availability — the ratio of shares still available to borrow against shares already lent out — has collapsed to just 6.1%. That means fewer than one share remains available for every sixteen already borrowed. A week ago the figure was 12%. On August 17, it was 84%. The speed of the collapse is the story: in roughly two weeks, the borrow market has gone from freely accessible to essentially closed. Cost to borrow has risen 39% over the past month to 1.23%, modest in absolute terms but moving in the same direction as availability. Short interest itself holds at 9.3% of free float — around 34.9 million shares — up 8% over the past month and continuing to grind higher even as the stock falls. The short thesis, built ahead of and reinforced by the August earnings miss, has not unwound. Bears are adding, not covering.
The Street has turned sharply more cautious in the wake of the August 18 results. JPMorgan downgraded to Neutral from Overweight on August 19, cutting its target from $22 to $18. UBS followed on August 24, moving from Buy to Neutral with a target of $16, down from $23. Wolfe Research downgraded to Peer Perform on August 25. Across the broader analyst community, a wave of target cuts landed in the August 19-25 window — Morgan Stanley, Barclays, Wells Fargo, BMO, and TD Cowen all reduced their numbers, even those maintaining positive ratings. Scotiabank initiated fresh coverage on September 2 at Sector Perform with a $16 target, providing a clean-slate read on valuation. The consensus now sits at 9 buys against 12 holds, with a mean target of $20.28 — implying roughly 42% upside from the current price, though that average may still reflect pre-downgrade targets not yet fully reset. The bull case rests on Klarna's position as the dominant pure-play BNPL network with growing merchant reach. The bear case points to credit performance uncertainty, competition in the interest-free segment, and execution risk around management transitions and geographic expansion.
On ownership, the top of the register remains heavily concentrated among early backers. Sequoia Capital holds 15.9%, and founder co-shareholders Victor Jacobsson and Anders Povlsen (via Heartland A/S) each hold above 5% per 13G filings, though those disclosures date to late 2025 and positions as last filed should be treated accordingly. No 13D activist is on the register. BlackRock added 2.7 million shares as of July 31, a notable institutional build from a firm that tends to move slowly. The ORTEX short score has held in a narrow range around 75-76 for the past two weeks — elevated, consistent, and not yet showing any sign of short fatigue.
The earnings history adds important context. The August 18 print produced a 24.5% single-day drop, followed by a further 27% loss over five days. The prior earnings event in mid-August also generated a 5.7% day-one decline and a 30.7% five-day loss. Both instances produced multi-day, not single-day, drawdowns. The next event is scheduled for November 18. Between now and then, the key tension is whether the borrow squeeze intensifies further — availability at 6% has room to fall to the 52-week low of 1.4%, last seen earlier in the year — or whether covering activity begins before the print. The CEO's open-market purchase adds an unusual countervailing signal to watch as that dynamic plays out.
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