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Klarna is ready to ride the IPO roller coaster

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Going public right now is like a roller coaster with a serious height restriction—only the tallest companies can buckle up for the ride. 

Klarna, the Swedish fintech unicorn that made its name in buy now pay later, last week filed to go public on the New York Stock Exchange under the ticker “KLAR.” And Klarna appears to meet the height requirement, so to speak—the company reported 2024 revenue of $2.8 billion (up from about $2.3 billion in 2023) plus 2024 net profits of $21 million. On Monday, Klarna followed up its F-1—not an S-1 because the company is based in Stockholm—by announcing it’s nabbed an exclusive buy now pay later deal with Walmart, a blow to rival Affirm. 

“Klarna is in a unique position with great revenue growth and the recent partnership with Walmart,” said Reena Aggarwal, director of the Georgetown University Psaros Center for Financial Markets and Policy, via email. “Even if this IPO is successful, it is not clear that IPOs more broadly will have a similar outcome.”

It’s important to remember that Klarna got here after enduring adversity. The company’s peak valuation in 2021 was $45.6 billion, and then tumbled to a low of $6.7 billion in 2022 in response to macroeconomic conditions and the fintech downturn. Since, the company’s valuation has gradually grown again, hitting the $15 billion range in the secondary markets. 

“Klarna was one of the first companies to ‘take their medicine’ in 2022 and substantially lower their valuation,” said Greg Martin, Rainmaker Securities managing director. “It was a bitter pill to swallow, but shows a prudent reset to create a few years of sustainable valuation growth to create a positive trajectory for an IPO. I think this will serve them well as investors like to think they are investing in long-term sustainable growth stories.”

“An important aspect of Klarna’s filing is their turnaround narrative—transitioning from substantial losses to achieving profitability ahead of their public debut,” Rudy Yang, PitchBook emerging technology senior analyst, said via email. “This reflects the market’s evolving expectations. However, their consumer credit losses represent a significant portion of their expenses, and could be further impacted by a potential economic down-cycle.”

Success for Klarna could have substantial ripple effects, private markets watchers say. 

“A strong debut by Klarna could encourage profitable or nearly profitable companies to go public once macro conditions stabilize,” said Howe Ng, head of data and investment solutions at Forge Global, via email.

These ripple effects could be especially clearly felt in fintech. 

“Klarna’s IPO represents a critical test case for the fintech sector, which has experienced a significant drought of public exits in recent years,” said PitchBook’s Yang. “For context, fintech public listings generated $222.7 billion in VC exit value in 2021. In the last three years combined, they generated just $28.7 billion.”

The IPO drought and fintech’s tough times have both coincided with the end of the ZIRP (zero interest rate policy) era, which led to higher interest rates and dicey consumer spending trends. 

“Investors and fintech companies alike will closely watch Klarna’s public market debut, as the company’s valuation and investor reception will establish a benchmark that could either accelerate or further delay the next wave of fintech offerings,” Yang added via email. 

I know, I know. The essential question remains: Is the IPO window open? CoreWeave, for example, carries a few big question marks, but recently filed to go public.

“The IPO market had opened up, however, it is very tough to get IPOs done when there is uncertainty and market volatility of last week,” Georgetown’s Aggarwal told Fortune. “Only the very strongest companies can go public in this environment and even they may get lower valuations than otherwise. We might need to wait for the markets to calm down before the IPO window opens fully.”

Until then, companies must be pretty darn tall to ride the IPO roller coaster. And once you’re on the ride, you’re likely to be thrown for a loop—or even a “loop-de-loop.” So, keep your arms, feet, legs, filings, and financials inside the ride. 

ICYMI… The SEC has issued new guidance making it easier for private equity and VC firms to more publicly advertise their funds and verify accredited investors based on high minimum investments. You can read more from Axios about the latest on Rule 506(c) here. Elsewhere, the Google-Wiz deal is reportedly back on, this time for (a reported) $33 billion.

See you tomorrow,

Allie Garfinkle
X:
@agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com



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Nvidia CEO Jensen Huang called GTC a Super Bowl where there are no losers — then he tackled concerns about China’s DeepSeek

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  • Jensen Huang reaffirmed Nvidia’s starring role in the AI industry during a keynote address at Nvidia’s annual GTC conference on Tuesday. Through its new open-source software, Huang showed how Nvidia can ramp up DeepSeek R1’s efficiency 30-fold. Yet, while he spoke, Nvidia’s stock price dropped more than 3%—after the company announced its GPU timelines.

Clad in his signature black leather, Nvidia CEO Jensen Huang took center stage at Nvidia GTC on Tuesday, defending the chip maker’s dominance in the industry and touting the impact it could have on DeepSeek. 

The event drew more than 25,000 people to the SAP Center’s National Hockey League arena, and Huang opened the keynote by launching t-shirts into the crowd and coronating this year’s GTC the “Super Bowl of AI.”

“The only difference is everybody wins at this Super Bowl, everybody’s a winner,” he joked. And like the Super Bowl, there were GTC watch parties and packed crowds to get a glimpse of Huang on stage. 

With his address, Huang sought to dispel any uneasiness around AI investment, and said discussion about lower spending does not concern Nvidia. In January, apprehension engulfed the chip maker after it lost $589 billion in market cap in a single day after Chinese AI reasoning model Deepseek R1 claimed to operate at a fraction of the cost. 

While large language models offer foundational knowledge, reasoning models offer more complex, analytical responses. Using the company’s new open source software Nvidia Dynamo, Huang said the tech giant’s Blackwell chips will be able to make DeepSeek R1 30 times faster. He then played a video demonstrating for the crowd how it could be done.

“Dynamo can capture that benefit and deliver 30 times more performance in the same number of GPUs in the same architecture for reasoning models like DeepSeek,” said Ian Buck, vice president and general manager of Nvidia’s hyperscale and HPC computing business.

From there, Huang’s keynote covered everything from the chip maker’s plans to roll out its newest chips— Blackwell Ultra later this year, Vera Rubin in 2026, and Feynman in 2027.

“We have an annual rhythm of roadmaps that has been laid out for you,” Huang said.

While Nvidia’s announced its strategic runway for years to come, that wasn’t enough to stop the stock’s slide. The chip maker’s share price tumbled 3.4% Tuesday.

This story was originally featured on Fortune.com



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Cathie Wood says most memecoins will end up ‘worthless’

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Most of the so-called memecoins that are flooding the $2.6 trillion cryptocurrency space will probably end up “worthless,” according to Cathie Wood. 

The combination of blockchain technology and artificial intelligence is creating “millions” of meme cryptocurrencies that “are not going to be worth very much,” the ARK Investment Managment LLC founder and CEO told Bloomberg Television on Tuesday, adding that her private funds are not putting money into these coins. 

Memecoins are a type of digital asset often inspired by jokes, current events or trends in popular culture. In February, the US Securities and Exchange Commission said memecoins are not considered securities so they will remain unregulated.

“If I have one message for those listening who are buying memecoins: buyer beware,” said Wood. “There’s nothing like losing money for people to learn, and they’ll learn that the SEC and regulators are not taking responsibility for these memecoins.”

This story was originally featured on Fortune.com



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JPMorgan stock traders score windfall as Trump jolts market

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A chaotic run in stock markets is unleashing a windfall for banks’ equities traders.

JPMorgan Chase & Co. is on track to boost revenue from equities trading by more than 30% this quarter from a year earlier, according to people with knowledge of the matter. If the trajectory holds, the firm would surpass its $3.3 billion record set four years ago.

Such a trend could spell even bigger bounties at Goldman Sachs Group Inc. and Morgan Stanley, which typically vie for the industry’s stock-trading crown. While JPMorgan’s increase is particularly steep, Goldman’s equities unit is also running ahead of its pace last year, when it reaped $3.3 billion in the first three months, the people said, asking not to be named because they weren’t authorized to speak publicly.

Market swoons set off by President Donald Trump’s abrupt policy announcements are — for banks, at least — creating a rare bright spot amid signs of economic trouble. But the gyrations have tripped up hedge funds, stalled dealmakers’ talks on prospective mergers and shaken consumer confidence.

The resilience of equities desks is a nod to their evolution since the 2008 financial crisis. Their earnings hinge less on taking risks with their balance sheets and more on facilitating surges in client trading in response to price swings. Individual stock moves have unleashed bursts of derivatives trading, driving up banks’ gains.

Representatives for JPMorgan and Goldman Sachs declined to comment.

The boon for banks contrasts with the impact on multistrategy hedge funds — the big, all-weather investing platforms geared toward eking out gains irrespective of market conditions. The two largest, Ken Griffin’s Citadel and Izzy Englander’s Millennium Management, posted rare losses in February and slumped further in early March.

There’s pain in other corners of investment banks. Some dealmakers are ruing predictions that Trump’s return to the White House would unleash a wave of activity. Instead, they’re grousing about the uncertainty created by sudden tariff proclamations. The volume of new transactions announced globally this year is lower than at the start of 2024.  

Morgan Stanley Co-President Dan Simkowitz said as much on Tuesday. Merger and acquisition announcements and new equity issuance are “certainly on pause” as clients assess Trump’s policies, he said at a conference hosted by his bank.

Before 2008, big US banks made proprietary bets on stocks to reap billions of dollars a year, rather than confining themselves to just passively fielding client orders. But as new regulations reined in risk-taking, banks leaned on other aspects of their businesses, such as providing financing to clients interested in levering up bets to juice returns.

Three banks have dominated the stock-trading business over the past decade. Morgan Stanley held the top spot for seven years starting in 2014 before ceding it to Goldman. 

Along with JPMorgan, the trio raked in almost $36 billion from their equities businesses last year, pulling further ahead of competitors.

This story was originally featured on Fortune.com



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