I told you good time to buy, page-1559

They did invest in Klarna as a 4% shareholder

CBA invested $100 million for a 2 per cent stake in Klarna in 2019, valuing the business at about $5 billion. The bank invested another $200 million in the company in early 2020. The investments came amid heightened concerns within the banking industry about the rise of buy now pay later platforms such as Afterpay, and their potential to disrupt the payments and credit card markets.

But surging inflation and rising interest rates have sparked a sharp sell-off for ASX listed buy now pay later operators this year, with shares in Zip Co and Sezzle both declining by about 90 per cent.

The settlement of Klarna’s latest round of funding, and its valuation at the level suggested by the media reports, would crystalise a massive loss on the paper value of the Commonwealth Bank’s stake, according to Morgan Stanley’s Richard Wiles.

In its most recent accounts, CBA valued its Klarna stake at just under $2.5 billion, down from $2.7 billion as of June 30 last year.

“An 85 per cent year-on-year reduction in the value of Klarna suggested by the media report would imply a writedown of around $2 billion in the value of CBA’s stake to around $400 million,” said the research note from Wiles.