Klarna’s Wall Street debut has not only revived the fintech’s long-awaited IPO ambitions but also delivered a rare windfall opportunity for its employees.
In a move seldom seen in the tech industry, the Swedish buy now, pay later giant is allowing staff to cash out some of their holdings during the IPO window, sidestepping the usual six-month lockup that restrains insiders from selling shares.
In an internal email sent on Wednesday and reviewed by Business Insider, Klarna told current and former employees that it is converting vested restricted stock units (RSUs) into tradable shares, exempting them from the post-IPO lockup. The converted shares can begin trading just days after Klarna’s $15 billion listing, offering workers immediate liquidity. The email noted that “roughly four RSUs will equal one publicly tradable share.”
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Klarna’s filing with the Securities and Exchange Commission does not specify how many of the ordinary shares offered will come from employees. However, the company said staff will be able to sell shares during the initial window until September 30, with subsequent trading limited to quarterly windows.
Such exemptions are uncommon but not without precedent. Airbnb, when it went public in 2020, allowed employees to sell up to 15% of their holdings within the first week of trading. Traditionally, lockup periods are imposed to protect new investors from a flood of insider sales, which can weigh down a stock in its early days. By bending that norm, Klarna is signaling an effort to reward its workforce, many of whom have seen the company’s valuation swing dramatically in recent years.
Stock-based compensation has long been a staple of tech employment packages, with RSUs serving as a way to align employee incentives with company performance. But for many staffers, the IPO represents the first tangible opportunity to realize cash from those paper awards.
IPO Market Return
Klarna’s shares opened at $52 on the New York Stock Exchange—30% above the IPO price of $40—before retreating to close at just under $46, still up 15% on the day. The debut valued the company at $15 billion, far below its $45.6 billion peak in 2021 but still a remarkable rebound from the $6.7 billion trough it hit just a year later.
The IPO, delayed from April after U.S. tariff announcements rattled markets, now sits among the year’s marquee offerings. It has already generated massive paper wealth for longtime backers Sequoia Capital and Heartland A/S, each reaping more than $1 billion. Cofounders Sebastian Siemiatkowski and Victor Jacobsson also saw their stakes climb above the billion-dollar mark by Wednesday’s close.
What Next for Klarna?
Some analysts believe that Klarna’s decision to let employees sell early could build loyalty at a critical moment, offering relief to staff who endured years of delayed IPO plans and fluctuating valuations. If shares stabilize above the $40 listing price, the company may establish itself as the bellwether of a resurgent IPO market, encouraging other fintechs and tech startups to follow suit.
However, the exemption could carry risks, they note. A wave of insider selling in the coming weeks might pressure Klarna’s share price, undermining confidence in its long-term prospects. If shares drift significantly below their debut levels, critics may question whether the company’s $15 billion valuation was sustainable—or whether early insider liquidity came at the expense of new investors.
Overall, the IPO is more than a listing—it is a carefully choreographed balancing act for Klarna. The fintech is attempting to satisfy both insiders and public shareholders in a volatile market that has not forgotten the bruising valuation resets of the last two years, by rewarding staff while courting Wall Street.