Commonwealth Bank of Australia (CBA) has reaped big windfall gains from the strong sharemarket debut of Klarna.
Shares in the Swedish buy now, pay later company jumped 30% when they started trading on the New York Stock Exchange on Wednesday (Thursday AEST), valuing it at US$19.65 billion (A$29.7 billion).
The share price (NYSE: KLAR) closed at $45.82 after opening at $52.00 and trading between $45.21 and $57.20 following the oversubscribed initial public offering (IPO) in which the shares were sold to investors at $40 each.
Australia’s largest bank has invested US$350 million in Klarna for a stake which was valued at $1.2 billion in a preliminary prospectus lodged with the Securities and Investments Commission (SEC) last week.
CBA intended to sell shares worth about $100 million in the IPO, leaving it with a 4.7% stake, according to SEC filings.
Launching a partnership with the Swedish company in 2020, CBA Chief Executive Officer Matt Comyn said customers could access Klarna through the CBA app to shop online.
As the tie-up did not yield the benefits the Australian bank hoped for, and CBA has been offloading minority shareholdings, analysts expect it to sell down the stake when allowed.
Klarna CEO and co-founder Sebastian Siemiatkowski, who did not sell any of his 7% stake, marked the occasion by livestreaming the bell-ringing ceremony on Instagram Live and X.
“I’ve got to be honest—this moment feels surreal. This week, as we ring the bell at the New York Stock Exchange and take Klarna public, we’re also reflecting on a huge milestone: Klarna turned 20 earlier this year,” Siemiatkowski said in a media release.
Chief Financial Officer Niclas Neglén was quoted in a Reuters story as saying the IPO was mainly an opportunity for new shareholders to “really partake in that journey to disrupt the financial services industry and be the next generation of personal finance”.
