Finance
European tech brain drain ‘number one risk’ ahead of IPO
Published
7 months agoon

Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.
Chris Ratcliffe | Bloomberg via Getty Images
A European technology talent brain drain is the biggest risk factor facing Klarna as the Swedish payments company gets closer to its upcoming initial public offering, according to CEO Sebastian Siemiatkowski.
In a wide-ranging interview with CNBC this week, Siemiatkowski said that unfavorable rules in Europe on employee stock options — a common form of equity compensation tech firms offer to their staff — could lead to Klarna losing talent to technology giants in the U.S. such as Google, Apple and Meta.
As Klarna — which is known for its popular buy now, pay later installment plans — prepares for its IPO, the lack of attractiveness of Europe as a place for the best and brightest to work has become a much more prominent fear, Siemiatkowski told CNBC.
“When we looked at the risks of the IPO, which is a number one risk in my opinion? Our compensation,” said Siemiatkowski, who is approaching his 20th year as CEO of the financial technology firm. He was referring to company risk factors, which are a common element of IPO prospectus filings.
Compared to a basket of its publicly-listed peers, Klarna offers only a fifth of its equity as a share of its revenue, according to a study obtained by CNBC which the company paid consulting firm Compensia to produce. However, the study also showed that Klarna’s publicly-listed peers offer six times the amount of equity that it does.
‘Lack of predictability’
Siemiatkowski said there a number of hurdles blocking Klarna and its European tech peers from offering employees in the region more favorable employee stock option plans, including costs that erode the value of shares they are granted when they join.
In the U.K. and Sweden, he explained that employee social security payments deducted from their stock rewards are “uncapped,” meaning that staff at companies in these countries stand to lose more than people at firms in, say, Germany and Italy where there are concrete caps in place.
The higher a firm’s stock price, the more it must pay toward employees’ social benefits, making it difficult for companies to plan expenses effectively. Britain and Sweden also calculate social benefits on the actual value of employees’ equity upon sale in liquidity events like an IPO.
“It’s not that companies are not willing to pay that,” Siemiatkowski said. “The biggest issue is the lack of predictability. If a staff cost is entirely associated with my stock price, and that has implications on my PNL [profit and loss] … it has cost implications for the company. It makes it impossible to plan.”
In the past year, Siemiatkowski has more clearly signalled Klarna’s ambitions to go public soon. In an interview with CNBC’s “Closing Bell,” he said that a 2024 listing was “not impossible.” In August, Bloomberg reported Klarna was close to selecting Goldman Sachs as the lead underwriter for its IPO in 2025.
Siemiatkowski declined to comment on where the company will go public and said nothing has been confirmed yet on timing. Still, when it does go public, Klarna will be among the first major fintech names to successfully debut on a stock exchange in several years.

Affirm, one of Klarna’s closest competitors in the U.S., went public in 2021. Afterpay, another Klarna competitor, was acquired by Jack Dorsey’s payments company Block in 2021 for $29 billion.
Klarna brain drain a ‘risk’
A study by venture capital firm Index Ventures last year found that, on average, employees at late-stage European startups own around 10% of the companies they work for, compared to 20% in the U.S.
Out of a selection of 24 countries, the U.K. ranks highly overall. However, it does a poorer job when it comes to the administration burdens associated with treatment of these plans. Sweden, meanwhile, fares worse, performing badly on factors such as the scope of the plans and strike price, the Index study said.
Asked whether he’s worried Klarna employees may look to leave the company for an American tech firm instead, Siemiakowski said it’s a “risk,” particularly as the firm is expanding aggressively in the U.S.
“The more prominent we become in the U.S market, the more people see us and recognize us — and the more their LinkedIn inbox is going to be pinged by offers from others,” Siemiatkowski told CNBC.
He added that, in Europe, there’s “unfortunately a sentiment that you shouldn’t pay that much to really talented people,” especially when it comes to people working in the financial services industry.
“There is more of that sentiment than in the U.S., and that is unfortunately hurting competitiveness,” Klarna’s co-founder said. “If you get approached by Google, they will fix your visa. They will transfer you to the U.S. These issues that used to be there, they’re not there anymore.”
“The most talented pool is very mobile today,” he added, noting that its now easier for staff to work remotely from a region that’s outside a company’s physical office space.
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Finance
These are 3 big things we’re watching in the stock market this week
Published
9 hours agoon
April 27, 2025
A security guard works outside the New York Stock Exchange (NYSE) before the Federal Reserve announcement in New York City, U.S., September 18, 2024.
Andrew Kelly | Reuters
The stock market bounce last week showed once again just how dependent Wall Street has become on the whims of the White House.

U.S. brands are rapidly losing their appeal in China as locals increasingly prefer competitive homegrown players, especially as economic growth slows, according to a TD Cowen survey released Thursday. While overall preference for Western brands dropped to 9%, down from 14% last year, certain American companies face higher risks than others, the report said, citing in-person interviews of 2,000 consumers with varied income levels in larger Chinese cities. TD Cowen partnered with an unnamed Beijing-based advisory firm to conduct the survey in February 2025, following a similar study in May 2024. The analysts see Apple ranking among the better-positioned brands in China. But they warned that several other American companies face high regional risks despite management optimism. China’s top leaders on Friday acknowledged the growing effect of trade tensions, and pledged targeted measures for struggling businesses. The official readout stopped short of a full-on stimulus announcement. “This year’s survey was conducted before the US-China trade war intensified, though threats were on the horizon,” the TD Cowen analysts said. “Add this factor to the equation, and it’s easy to see why uncertainty will remain elevated and households are likely to remain cautious going forward.” The survey found income expectations declined, with the share of respondents expecting a decline in pay over the next 12 months rising to 10% from 6%. In particular, Chinese consumers plan to spend less on a beauty items over the next six months, the survey showed, while increasing their preference for Chinese brands. U.S. cosmetics giant Estée Lauder retained first place in terms of highest awareness among Western beauty brands in China, but preference among consumers dropped to 19.6% of respondents, down from 24.3% last year. That contrasted with increases in respondents expressing a preference for the second and third market players Lancome and Chanel, respectively. In the quarter that ended Dec. 31, Estée Lauder said its Asia Pacific net sales fell 11%, due partly to “subdued consumer sentiment in mainland China, Korea and Hong Kong.” Asia Pacific accounted for 32% of overall sales in the quarter. In the lucrative sportswear category, Nike “lost meaningful preference in every category” versus last year, while local competitors Li-Ning and Anta saw gains, the survey found. TD Cowen’s analysis showed that among U.S. sportswear brands facing the most earnings risk relative to consensus expectations, Nike has the highest China sales exposure at 15%. “The China market is one characterized as a growth opportunity for sport according to Nike management in its recent fiscal Q3:25 earnings call in March 2025,” the analysts said, “but that the macro offers an increasingly challenging operating environment.” It’s not necessarily about slower growth or nationalism. While the survey found a 4-percentage-point drop in preference for foreign apparel and footwear brands, it also showed a 3-percentage-point increase in the inclination to buy the “best” product regardless of origin. “The implied perception here is that Western brands are offering less in the way of best product or value,” the TD Cowen analysts said. Starbucks similarly is running into fierce local competition while trying to maintain prices one-third or more above that of competitor Luckin Coffee, the report said. The survey found that the U.S. coffee giant “lags peers in terms of value and quality perception improvement.” Other coffee brands such as Manner, Tim’s, Cotti, %Arabica and M Stand have also expanded recently in China. Starbucks’ same-store sales in China fell 6% year on year in the quarter that ended Dec. 29, bringing the region’s share of total revenue to just under 8%. More worrisome is that a highly anticipated coffee boom in China may not materialize. “We note daily and weekly frequency of purchase among coffee drinkers are decreasing, suggesting the coffee habit seen in the U.S. is not taking hold in China,” the analysts said. They noted a new ownership structure for Starbucks‘ China business would be positive for the stock given the lack of near-term catalysts. TD Cowen rates Starbucks a buy, but has hold ratings on Nike and Estée Lauder.
Finance
Apple iPhone assembly in India won’t cushion China tariffs: Moffett
Published
1 day agoon
April 26, 2025

Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.
Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.
He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.
“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”
Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.
“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.
Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.
“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”
Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.
“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”
Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.
“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”
According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.
“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”
Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.
To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5, at the Nasdaq in Times Square.

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