Klarna Sinks Below IPO Price as Fintech Competition Heats Up (2)

Just weeks after a buzzy trading debut, Klarna Group Plc shares fell below the initial public offering price for the first time in the face of increased competition from rivals and worries about the path of interest rates.

The digital-payments firm’s stock fell 3.8% to $39.94 Friday, closing below the $40 listing price. Klarna started trading on Sept. 10 after the company and some of its backers raised about $1.58 billion in an offering that was double-digit oversubscribed and priced above the marketed range.

The stock’s slide comes as a record-setting rally in US technology stocks hit pause this week after a series ...