Buy now, pay later

Good morning, savvy shoppers. This is your Stock Market Rundown for March 7th, 2024. Thanks for hanging out with me, once again. Let’s dig in:

TODAY’S TOP STORY: FOUR EASY PAYMENTS

Klarna isn’t a household name, but if you’re an avid online shopper, you’ll be all too familiar with it. Can’t afford that leopard-print jumpsuit at H&M, or sick pair of kicks at Nike? Just pay in four easy installments. 

As a specialist in “Buy Now, Pay Later”, Klarna connects with online retailers’ checkouts so that shoppers can defer payment, even without a credit card. The founder and now-CEO, Sebastian Siemiatkowski, met his co-founder Niklas Adalberthwas while they were working the fryer at Burger King in their hometown of Stockholm, Sweden.

In 2005, they entered their idea of a “Buy Now, Pay Later” service into the annual entrepreneurship competition at their university. They ranked last. The judges who passed on their pitch must be regretting it: Klarna now manages two million purchases a day across 45 countries.

Customers rushing to shop online during the pandemic caused a surge in popularity for “Buy Now, Pay Later” payment options, which sent Klarna’s market value soaring to a staggering $46 billion. But by 2022, the tech downturn hit, and its valuation dropped by 85%. 

It was a setback, but Klarna may be about to snatch victory from the jaws of defeat. It’s angling for an IPO, which could value it at $20 billion. 

Some critics say “Buy Now, Pay Later” makes it too easy for consumers to dig themselves into debt. But CEO Siemiatkowski doesn’t seem too worried that his customers will have a sudden onset of frugality.

As he quipped in an interview: “Once you get the snowball rolling, you can actually do quite a lot of stupid things, and the snowball will continue rolling.” Maybe that goes for stupid online purchases at 2 AM, too.

Have you ever paid for an online purchase in installments?
Was it Buy Now, Regret Later? Let us know in the comments:

SO WHAT ELSE IS GOING ON?

• The board of WeightWatchers just lost 167 pounds. Oprah Winfrey resigned her board seat after she was labeled a hypocrite for taking weight-loss drug Ozempic. Can’t really blame Oprah for wanting a little pharmaceutical help… losing weight with willpower alone is tough when those ice cream bars in the freezer start calling your name.

• Layoffs watch: online travel company Expedia is cutting 9% of its employees. Restructuring a workforce like trying to repack your suitcase at the end of your vacation… you may have to leave a few souvenirs behind on the hotel nightstand.

• TJ Maxx, favorite store of wine moms on a budget, beat expectations as bargain-hunting shoppers scoured the cluttered aisles for deals. 

• Wendy’s announced plans to start “dynamically pricing” its food, then frantically backpedaled due to social-media backlash. Apparently the burger-eating community isn’t into surge pricing for their Double Whoppers.

Time to hit the pause button for today, dear readers; see you bright and early tomorrow. Yours in capitalism, The Axe

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