Trump Tariffs Force Klarna, StubHub to Delay IPOs

In response to President Donald Trump's announcement of comprehensive tariff measures, which disrupted the U.S. market, Klarna and StubHub have decided to postpone their initial public offerings (IPOs). Both companies had recently filed their IPO prospectuses with the U.S. Securities and Exchange Commission (SEC).

Klarna, a Swedish "buy now, pay later" loan provider, had intended to list on the New York Stock Exchange under the ticker symbol KLAR. StubHub, an online ticket marketplace, was scheduled to list on the New York Stock Exchange under the ticker symbol STUB and was preparing to commence its roadshow on Monday. However, due to the market instability, both companies have temporarily halted their much-anticipated IPO plans. The precise timing for their stock issuance remains undetermined.

The market turmoil was initiated by Trump's signing of an executive order on Tuesday, implementing a broad tariff plan. This announcement triggered a wave of selling, with the Dow Jones Industrial Average dropping 4% and the S&P 500 falling 4.5% on Friday. The Nasdaq index recorded its worst single-day performance since 2020 on Thursday and continued to decline by 4.5% during Friday's trading session, marking its worst week since the start of the pandemic.

This situation presents a significant setback for venture capital firms, which had anticipated a resurgence in the IPO market during Trump's administration following a period of lackluster performance by large companies exiting the market. CoreWeave, an artificial intelligence infrastructure company, became the first venture-backed tech company to raise at least $1 billion through an IPO in the U.S. since 2021. However, CoreWeave had to lower its IPO price before going public and experienced poor performance in its first two days of trading. Its stock price plummeted 13% on Friday.

Hinge Health, a digital physical therapy startup, has also submitted an IPO application. The submission of numerous IPO prospectuses had fueled optimism on Wall Street that the door to listings for emerging tech companies was opening. However, this optimism was dampened by Trump's announcement of large-scale tariff measures.

Klarna's prospectus mentioned the potential impact of tariffs as a risk factor, stating that economic downturns or slower economic growth, including changes in international trade policies, multilateral trade agreements, or the imposition of new tariffs, taxes, and other restrictive measures, could lead to reduced consumer spending and negatively affect the financial condition of its merchants. Hinge Health also listed tariffs as a factor that could limit its business growth and negatively impact its operating performance.