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Klarna to raise fresh cash at slashed $6.5B valuation

wsj.com

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Re: Klarna to raise fresh cash at slashed $6.5B valuation

#21

Post by missedthecue »

spaceman_2020 wrote: post #3

> But if completed, it would represent a huge discount on the company’s valuation when investors led by an arm of SoftBank Group Corp. Why is it that SoftBank somehow always manages to buy the top?

I've thought about this too and I think it's because their strategy is structurally flawed. Their focus is on new/newish tech companies, but they don't make $3 million investments. They want to make $3 billion investments.

But when you're buying stakes that size in companies that aren't yet mature, you're almost necessarily going to be chronically overpaying. There just aren't many 4 year old companies that actually have real upside when you're buying in at a $100b or $200b valuation.

When you're making investments that big, you've got to go back to value investing like Warren Buffett or the Norwegian Sovereign Fund. That's the only place to sustainably put billions to work. And you'll have to accept the 8% annual returns that come with it.

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#22

Post by greatgib »

rvz wrote: post #5

Klarna is absolutely over-hyped, overvalued and a glorified bank and a complete scam. It also seems that an investor unloaded their shares worth $7.6m a year ago [0][1][2] at a $48B valuation to get retail sucked in and investing at that valuation on a crowdfunding platform. Fast forward today, those 6,971 new investors have lost money as Klarna is on a series of downrounds; now at $6.5B. Now that is what I call a ma…

Hopefully, the investment round in Crowdcube was cancelled as they had "issues issuing the share in a timely manner". So Crowdcube users were saved by chance!

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#23

Post by [deleted] »

rvz wrote: post #5

Klarna is absolutely over-hyped, overvalued and a glorified bank and a complete scam. It also seems that an investor unloaded their shares worth $7.6m a year ago [0][1][2] at a $48B valuation to get retail sucked in and investing at that valuation on a crowdfunding platform. Fast forward today, those 6,971 new investors have lost money as Klarna is on a series of downrounds; now at $6.5B. Now that is what I call a ma…

[deleted]

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#24

Post by imtringued »

toomuchtodo wrote: post #4
spaceman_2020 wrote: post #3

> But if completed, it would represent a huge discount on the company’s valuation when investors led by an arm of SoftBank Group Corp. Why is it that SoftBank somehow always manages to buy the top?

Exuberance + deep pockets. When you are unconstrained, it is easy to be less judicious about investments. I very much enjoyed Matt Levine's take on how exuberant Masayoshi Son is. https://www.bloomberg.com/opinion/newsletters/2019-10-23/mon...

But deep pockets would suggest that you have more.momey to spend on negotiations. A one billion investment justifies spending a million on the negotiations.

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#25

Post by palcu »

rvz wrote: post #5

Klarna is absolutely over-hyped, overvalued and a glorified bank and a complete scam. It also seems that an investor unloaded their shares worth $7.6m a year ago [0][1][2] at a $48B valuation to get retail sucked in and investing at that valuation on a crowdfunding platform. Fast forward today, those 6,971 new investors have lost money as Klarna is on a series of downrounds; now at $6.5B. Now that is what I call a ma…

I tried getting into the Crowdcube investment round, but after they got the allocations, the whole deal fell through and I was refunded.

Needless to say I’m pretty happy they didn’t take my money in the end.

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#27

Post by tootie »

ilrwbwrkhv wrote: post #26

Klarna and affirm are the next gen of bullshit companies. Like Uber and WeWork before it. Absolutely massive scams fed with easy money and dumping on the next fool.

They're all real business with real value. I blame the VCs who kept feeding them endless amounts of capital when they were clearly hitting a ceiling of how much value they could generate.

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#28

Post by parkingrift »

Buy now, pay later would never have left the drawing board if interest rates weren’t artificially low for so long. Who wouldn’t want to to take a 0% interest loan in a bull market?

All the investors burned by BNPL nonsense have the Federal Reserve to thank. Making winners and losers every day. But it’s a free market still, because it sounds cool to say it muh man!

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#29

Post by hef19898 »

ilrwbwrkhv wrote: post #26

Klarna and affirm are the next gen of bullshit companies. Like Uber and WeWork before it. Absolutely massive scams fed with easy money and dumping on the next fool.

Which is said for Klarna, because there seems to be an actual market for what they do. Using cheap VC money ruined a perfectly fine market opportunity, and a chance to build a sustainable business. Well, I think we will see a lot more of those in the next months.

Re: Klarna to raise fresh cash at slashed $6.5B valuation

#30

Post by thsijustin »

parkingrift wrote: post #28

Buy now, pay later would never have left the drawing board if interest rates weren’t artificially low for so long. Who wouldn’t want to to take a 0% interest loan in a bull market? All the investors burned by BNPL nonsense have the Federal Reserve to thank. Making winners and losers every day. But it’s a free market still, because it sounds cool to say it muh man!

All while admitting they don’t know anything:

Powell was recently quoted as saying "We understand better how little we understand about inflation.”

The authority and respect the last generation commands needs a real challenge. Substantive change and not just chanting “disrupt” while playing the same game.

Their figurative identities should not be sacrosanct.

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