LK - Luckin Coffee Inc.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
1.3800
-1.6200 (-54.00%)
At close: 4:00PM EDT
Stock chart is not supported by your current browser
Previous Close3.0000
Open2.1000
Bid0.0000 x 312500
Ask0.0000 x 40700
Day's Range1.1900 - 2.4600
52 Week Range1.1600 - 51.3800
Volume163,366,447
Avg. Volume36,447,795
Market Cap349.343M
Beta (5Y Monthly)N/A
PE Ratio (TTM)N/A
EPS (TTM)N/A
Earnings DateNov. 13, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est46.60
  • Stock Markets Finish Sharply Higher for a Surprising Reason: China
    Motley Fool

    Stock Markets Finish Sharply Higher for a Surprising Reason: China

    The U.S. stock market came out of the holiday weekend with just as much upward momentum as it had last week. All three major market benchmarks gained ground, with the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite picking up 1.5% to more than 2% on the day. Today, however, some news from China caused more bullish sentiment to appear across the globe, and even Wall Street benefited from some of the optimism that market participants felt as a result.

  • 3 Dividend Stocks That Are Perfect for Retirement
    Motley Fool

    3 Dividend Stocks That Are Perfect for Retirement

    These companies offer income investors the possibility of substantial long-term share price growth in addition to their regular quarterly payouts.

  • Luckin Coffee Shareholders Vote to Remove Chairman, Report Says
    Bloomberg

    Luckin Coffee Shareholders Vote to Remove Chairman, Report Says

    (Bloomberg) -- Luckin Coffee Inc.’s chairman, Charles Zhengyao Lu, was ousted by shareholders from the scandal-plagued Chinese company, just days after surviving an effort by some directors to strip him of control, local media reports said, citing unidentified sources.Three other board directors including Sean Shao were also removed at an extraordinary shareholders meeting in Beijing on Sunday, according to the reports from 21st Century Business Herald and Sina, while Ying Zeng and Jie Yang will be added as independent board directors.A company representative didn’t respond to requests for comment.The removal of Lu is the culminating step in a major shakeup of top management since fabricated transactions dating back to April 2019 came to light earlier this year. The coffee chain already fired its chief executive and chief operating officers, among other employees, in May as it came under investigation by Chinese and U.S. regulators.The voting result ended a temporary reprieve for Lu, who remained chairman after a proposal to remove him from the startup he founded wasn’t approved by the required two-thirds of directors at a special meeting last week. According to Luckin’s Articles of Association, a director can be removed by shareholders or other board directors.Luckin’s executive shakeup is an unusual case in China, where it’s rare for a private startup to oust a founder and chairman, who is considered the soul of the firm. Lu and others were removed in a bid to distance the company from the financial scandal and allow it to continue operating more normally.Lu’s dismissal comes after Luckin said it substantially completed an internal investigation into the financial irregularities. Once considered among China’s brightest growth stories, the chain has seen its stock become almost worthless, plunging 94% this year.The company said last week its internal investigation concluded that net revenue last year was inflated by about 2.12 billion yuan ($300 million) while costs and expenses were boosted by 1.34 billion yuan. After the conclusion of the investigation, a majority of directors had requested Lu’s resignation.Banks Face $300 Million Shortfall on Luckin Margin LoansLuckin’s fall has ensnared banks including Credit Suisse Group AG and Morgan Stanley as they face a $300 million shortfall on margin loans made to Lu. The scandal is also a black eye for China Inc. as the U.S. Congress moves closer to passing legislation that could bar Chinese companies from trading on U.S. stock exchanges.Luckin said it would fire a dozen workers and discipline 15 others following the internal investigation. It already dismissed CEO Jenny Zhiya Qian, COO Jian Liu and some employees who reported to them in May after uncovering the scheme that funneled funds to the company from several third parties with links to the participants. The board said it fired the executives based on evidence showing their participation in the false transactions.Lu became a billionaire after his fast-growing Chinese chain went public in the U.S., but much of his wealth was wiped out by the plunge in Luckin’s stock. Lu last month resigned as chairman of Car Inc., China’s biggest rental-car fleet operator, as scrutiny increased over Luckin and the accounting scandal. A Beijing court has frozen Lu’s entire stake in Car Inc.’s parent, UCAR Inc., for judicial reasons.He has drawn criticism for applying an aggressive cash-burning expansion strategy to all his startup projects, as the model helps quickly expand the businesses and gain market share at the expense of profitability.Luckin, founded in 2017, raised $645 million in its U.S. IPO last year and counted BlackRock Inc. among its backers. It took direct aim at Starbucks Corp. in China, with a strategy to open more stores in two years than the Seattle-based heavyweight has in two decades.(Updates on attribution of media reports)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Luckin Coffee Board Fails in an Attempt to Remove Chairman
    Motley Fool

    Luckin Coffee Board Fails in an Attempt to Remove Chairman

    Charles Zhengyao Lu is keeping his job at Luckin Coffee (OTC: LKNC.Y), the company announced in a regulatory document filed after market hours on Thursday. Its board of directors held a meeting to remove him as board member and chairman, but the board did not gain the two-thirds majority needed to eject Lu. The CEO and COO at the time, Jenny Zhiya Qian and Jian Liu, respectively, were both fired as a result.

  • Billionaire Louis-Dreyfus’s Holding Company Falls in Value Again
    Bloomberg

    Billionaire Louis-Dreyfus’s Holding Company Falls in Value Again

    (Bloomberg) -- Louis Dreyfus Holding BV, the parent company of the agricultural-trading giant, saw its equity value decline again last year as it continued to pay high dividends despite losing money.The group’s finances are increasingly in focus as billionaire owner Margarita Louis-Dreyfus tries to sell a stake after borrowing at least $1 billion to fund a buy-out of other family members. She’s been said to have struggled to do so due to her reluctance to give up control and lukewarm interest from investors.LDH, the holding company for trader Louis Dreyfus Co. and Brazilian sugar group Biosev SA, reported a net loss of $52 million last year, according to its annual report filed with Dutch regulators. It also paid a $280 million dividend.That reduced LDH’s equity value to $3.8 billion at the end of 2019, from $4.1 billion a year earlier. The company proposed a further $223 million dividend this year to be paid “from the retained earnings,” according to the report.A spokesperson for LDC declined to comment.The trading house, the ‘D’ in the quartet of powerhouse agricultural merchants known as the ‘ABCDs,’ has been struggling with low profitability in recent years because of a global trade war, oversupplied markets and the fallout from African swine fever outbreaks. LDH’s proposed dividend for this year represents almost all of the $230 million net income reported by LDC for 2019.Among LDC’s headaches is an investment in Luckin Coffee Inc., the Chinese chain embroiled in a scandal over faked transactions. LDH’s annual report showed that the trading house “partially reduced” its shareholding in Luckin between January and March this year -- before the coffee company first announced an internal investigation into its accounting that sent the shares plunging. The spokesperson declined to say how many Luckin shares were sold.Russian-born Louis-Dreyfus, who owns about 96% of LDH, has been squeezing the group for cash as she makes good on a commitment to buy the shares of other family members. Over the past five years, the equity value of the group has fallen by more than a third.Louis-Dreyfus pledged her controlling stake in LDH to Credit Suisse Group AG to secure a $1 billion loan in early 2019. LDH’s annual report showed that around the same time, LDH made a $50 million loan to Akira BV, the main holding company for Louis-Dreyfus’s shares in the group.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • His Wealth Surged by $25 Billion. Then Jack Ma’s Rival Quit
    Bloomberg

    His Wealth Surged by $25 Billion. Then Jack Ma’s Rival Quit

    (Bloomberg) -- Colin Huang’s ascent is one for the history books: In just six months, his fortune swelled by $25 billion -- one of the biggest gains among the world’s richest people.His Pinduoduo Inc., a Groupon-like shopping app he founded in 2015, has become China’s third-largest e-commerce platform, with a market value of more than $100 billion. In the first quarter, as the coronavirus pandemic caused most of the nation’s economy to grind to a halt, PDD’s active users surged 68% and revenue jumped 44%, the company said in May.Now Huang, who has overseen the firm as its American depositary receipts have more than quadrupled in less than two years, has stepped down as chief executive officer.At one point, his net worth climbed as high as $45 billion, placing him just behind China’s wealthiest people -- Tencent Holdings Ltd.’s Pony Ma and Alibaba Group Holding Ltd.’s Jack Ma -- on the Bloomberg Billionaires Index. That’s even as PDD continued to post losses, primarily because it chases growth with the help of generous subsidies and has been known to spend more on marketing than it earns in sales.“Pinduoduo was perfectly positioned for people being stuck at home,” said Tom Ronk, CEO of Century Pacific Investments in Newport, California.Huang, who controlled 43.3% of PDD shares, has reduced his stake to 29.4%, according to a June 30 regulatory filing. His fortune now stands at $30 billion.That excludes a $2.4 billion charitable holding that he shares with PDD’s founding team, and $7.9 billion that went to Pinduoduo Partnership, of which Huang and newly named CEO Lei Chen are members. The partnership will help fund science research and management incentives, according to a letter following Huang’s resignation. The wealth estimate also excludes $3.9 billion that people familiar with the matter said was transferred to an angel investor.PDD declined to comment on Huang’s holdings or net worth.Facing ChallengesHe will remain chairman and work on the company’s long-term strategy and corporate structure to help drive the future of the e-commerce giant, PDD said.“PDD is still facing some high-level challenges in product supply, relationship with brand merchants, logistics and payments,” said Shawn Yang, an analyst at Blue Lotus Capital Advisors. “Colin may want to focus more on these issues.”PDD’s success hinges on deals, which have become particularly popular with customers looking for bargains as the world’s second-largest economy slows. Most of its users come from smaller Chinese cities, and the app gives them extra discounts when they recommend a product through social networks and get friends to buy the same item.Fen Liu, a homemaker in Quanzhou, a provincial city in Fujian, said she accrued enough coupons with her friends’ help to reduce the price of a suitcase to zero.“I couldn’t believe my eyes when I saw my suitcase arrive in the mail,” she said. “It’s made me a loyal Pinduoduo user ever since.”‘Bargain Hunters’While PDD’s aggressive price-reduction strategies have helped win over people with lower incomes, they may stifle the company’s efforts to attract wealthier consumers, according to Charlie Chen and Veronica Shen, analysts at China Renaissance Securities in Hong Kong.“PDD’s users are largely bargain hunters reluctant to buy large-ticket items,” they wrote in a June 29 note, adding that the company’s image remains a key obstacle to users spending more. “We believe PDD is working to change its low-price brand image -- but this could be costly.”That may require heavy marketing and hurt margins further despite a strong user-base foundation for future growth, the analysts said. And PDD’s management has offered no clear path to profitability.Last year, the company’s “10 Billion RMB Subsidies” campaign, which is ongoing, led to a $2 billion increase in sales and marketing expenses to $3.9 billion, and those costs have been at 90% to 120% of revenue for the past two quarters, China Renaissance said.For the nation’s June 18 shopping festival, PDD provided a subsidy program with no cap across different product categories to push spending and attract more users. Other fast-growing Chinese startups -- including rival Meituan Dianping, ride-hailing app DiDi Chuxing and Starbucks Corp. competitor Luckin Coffee Inc. -- have also adopted subsidies strategies to maintain customer loyalty.Huang, 40, grew up in the eastern city of Hangzhou, where Alibaba has its headquarters. After receiving a degree at Zhejiang University, he went to the University of Wisconsin for a master’s in computer science. He began his career at Google in 2004 as a software engineer and returned to China in 2006 to help establish its operations in the country.He then became a serial entrepreneur. He started his first company in 2007, an e-commerce website called Ouku.com that he sold three years later after realizing it was too similar to thousands of others. He then launched Leqi, which helped companies market their services on websites like Alibaba’s Taobao or JD.com Inc., and a gaming firm that let users play on Tencent’s messaging app WeChat. Both took off and Huang found himself “financially free,” according to a 2017 interview.After getting an ear infection, he decided to retire in 2013 at age 33. But following a year of pondering what to do with his life -- he contemplated starting a hedge fund and moving to the U.S. -- he came up with the idea of combining e-commerce and social media. At the time, Alibaba dominated the online business, and WeChat became a must-have application on smartphones in China.The tables have turned since. In 2018, Alibaba launched a PDD-style app in an attempt to lure smaller-town users with bargains. It came months before Huang took his company public in New York, raising $1.63 billion in its July 2018 initial public offering. Since then, PDD has surged 389%, while Alibaba has gained just 13%.In 2017, Huang had said he was unlikely to spend the rest of his life at PDD. While he’s still chairman of the company, he now wants to give more responsibility to younger colleagues to keep the entrepreneurial spirit as PDD matures, he wrote in a letter to employees.“We envision Pinduoduo to be an organization that creates value for the public rather than being a showoff trophy for a few or carry too much personal color,” Huang said. “This will allow Pinduoduo to continually evolve with or without us one day.”(Updates PDD, Alibaba moves in 22nd paragraph. A previous version of this story corrected Fen Liu’s location.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Credit Suisse Reviews Risk Structures to Boost Bank Oversight
    Bloomberg

    Credit Suisse Reviews Risk Structures to Boost Bank Oversight

    (Bloomberg) -- Credit Suisse Group AG has embarked on a wide-ranging assessment of its risk controls as Chief Executive Officer Thomas Gottstein seeks to bolster oversight at Switzerland’s second-biggest lender.The bank is considering centralizing risk management processes because they are too fragmented, often cutting across several business units, people familiar with the matter said. The risk structure is currently a topic of discussion at the executive committee level, the people said, asking not to be identified as the matter is private.Gottstein, who took over in February in the wake of a damaging spying scandal that led to the ouster of Tidjane Thiam, is working to restore calm after a turbulent phase. The bank has worked on deals linked to Luckin Coffee Ltd. and Wirecard AG, two companies embroiled in high-profile scandals. Credit Suisse has also started an internal probe into supply chain finance funds with links to Masayoshi Son’s SoftBank Vision Fund.“Credit Suisse has a strong risk organization with an excellent track record,” the bank said in a statement. “Notwithstanding this, as part of good governance, we are constantly looking at ways to further improve effectiveness and efficiency across our second line of defense structures, including in the risk organization.”The bank said this is not linked to what it called “unfounded media reports” about Credit Suisse’s supply chain finance funds and its role in helping SoftBank cut its exposure to Wirecard.Warner’s ReviewThe review builds on work by Chief Risk Officer Lara Warner, who has been seeking to make her mark since being promoted in a shakeup last year. She previously served as chief financial officer and operating officer at the investment bank, and led a review in 2018 into how the bank handled an alleged sexual assault dating back to 2010.One of the early moves under Warner as risk chief was to change the composition of the global reputational risk committee last fall, which decides on potentially harmful client relationships and transactions that have been escalated from one of the bank’s divisions, according to a person familiar with the matter.Since then, the scandals at Luckin Coffee and Wirecard have further underscored the need for efficient controls at lenders including Credit Suisse. The Swiss bank organized a margin loan for Luckin Coffee founder Lu Zhengyao. In April, Credit Suisse took a large hit in its Asian business, setting aside about $100 million for soured loans which mostly related to three cases, the largest of which was Luckin.SoftBank LinksThe bank also helped sell $1 billion of Wirecard-linked securities last year after questions were raised about the German company’s accounting. SoftBank had initially agreed to buy the convertible debt, but then cut its exposure through a series of transactions. Wirecard last month filed for insolvency, the culmination of a stunning accounting scandal that has rattled financial circles.Its ties to SoftBank could also become a factor in an internal Credit Suisse probe of its supply chain funds. The investment vehicles hold short-term corporate loans and finance a number of startups backed by the SoftBank Vision Fund. The loans are sourced by Greensill Capital, which is also backed by SoftBank.The Financial Times reported that SoftBank invested more than $500 million into the funds, raising questions about a potential conflict of interest. Credit Suisse has denied that there was such a conflict.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • After grinding investigation, Luckin Coffee confirms $300 million revenue fraud
    TechCrunch

    After grinding investigation, Luckin Coffee confirms $300 million revenue fraud

    Luckin Coffee’s drips and drops of news the past few weeks — including a boardroom feud that is pitting the company’s chairman against a special investigation committee looking into an alleged massive fraud — is now turning into a flood. In a new SEC filing this morning, the company’s Special Committee, which was tasked with investigating claims that the one-time China-based coffee darling overstated its revenues by hundreds of millions of dollars, has returned with its verdict: The company did indeed inflate revenues by nearly $300 million. In its filing, the company said, “In the course of the Internal Investigation, the Special Committee and its advisors reviewed over 550,000 documents collected from over 60 custodians, interviewed over 60 witnesses and performed extensive forensic accounting and data analytics testing.”

  • GlobeNewswire

    Luckin Announces the Substantial Completion of the Internal Investigation

    Luckin Coffee Inc. (the “Company”) (LKNCY) announced that its Special Committee of the Board of Directors (the “Special Committee”), with the assistance of its advisors, Kirkland & Ellis International LLP and FTI Consulting, has substantially completed its independent internal investigation (the “Internal Investigation”) into the issues disclosed in the press release issued by the Company on April 2, 2020. The Special Committee was formed on March 19, 2020 and authorized by the Board of Directors (the “Board”) to access documents, records and information of the Company, and to conduct interviews with any employee, officer and director, as the Special Committee deemed appropriate.

  • Luckin Coffee’s board is forcing out its chairman (also, chairman is forcing out the rest of the board)
    TechCrunch

    Luckin Coffee’s board is forcing out its chairman (also, chairman is forcing out the rest of the board)

    After announcing this morning that it is ending its fight to stay listed on Nasdaq, China-based coffee chain and delivery company Luckin Coffee announced in a filing with the SEC that it is requiring that its chairman, Lu Zhengyao, resign. It also announced in its SEC filing that the chairman has requested the firing of independent director Sean Shao through a shareholders resolution, which will be voted upon at a shareholders meeting to be held on Sunday, July 5th. It’s getting ugly at Luckin, which is struggling to turnaround in the aftermath of revelations of a $300 million accounting fraud that has seen its stock price plummet in recent months.

  • GlobeNewswire

    Luckin Coffee Received a Notification to Convene an Extraordinary General Meeting

    Luckin Coffee Inc. (the “Company”) (LK) today announced that the Board of Directors of the Company (the “Board”) was notified (the “Notification”) by Mr. Charles Zhengyao Lu that, in his capacity as the Chairman of the Board, he had decided to convene an Extraordinary General Meeting of the shareholders of the Company (the “Proposed EGM”)  at 15:00, July 5, 2020, Beijing time, pursuant to a requisition by Haode Investment Inc. (“Haode”). Haode, a company beneficially owned by Mr. Lu, is a stockholder of the Company holding 208,146,050 Class B ordinary shares, which represent approximately 37.2% of the aggregate voting power of the Company’s equity stocks as of June 26, 2020.

  • GlobeNewswire

    Proposal of Resignation and Removal of the Chairman of the Board

    Luckin Coffee Inc. (the “Company”) (LK) announced that the Board of Directors of the Company (the “Board”), resolved to require Mr. Charles Zhengyao Lu to resign as a director and the chairman of the Board, and pursuant to article 101 of the articles of association of the Company, a meeting of the Board will be held on July 2, 2020 to consider the proposal to remove Mr. Charles Zhengyao Lu, as a director and the chairman of the Board (the “Proposed Resignation and Removal”). The Proposed Resignation and Removal was requested by the majority of directors of the Board, and based on findings presented by and the recommendations of the Special Committee of the Board (the “Special Committee”).

  • Luckin Coffee will unluckin’ly delist from Nasdaq following fraud allegations
    TechCrunch

    Luckin Coffee will unluckin’ly delist from Nasdaq following fraud allegations

    The company, in a statement today filed with the SEC, said that it would not contest Nasdaq’s decision to delist the company after having received two notifications in recent weeks of the stock exchange’s desire to push the China-based coffee chain from its market. The saga of Luckin was an extraordinarily exciting one.

  • GlobeNewswire

    Luckin Coffee Announces Withdrawal of its Request for Nasdaq Hearing

    As previously disclosed, the Company received two written notices (the “Notices”) from the Listing Qualifications Staff (the “Listing Qualifications Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”), indicating the grounds of its decision to delist the Company’s securities from Nasdaq. On May 22, 2020, the Company requested an oral hearing before the Nasdaq Hearings Panel pursuant to Market Place Rule 4820.

  • Why 'buy on the dip is still very much a quality over quantity game': Expert
    Yahoo Finance Video

    Why 'buy on the dip is still very much a quality over quantity game': Expert

    Fitz-Gerald Group Chief Investment Officer Keith Fitz-Gerald joins Yahoo Finance’s Akiko Fujita to break down the latest market action after President Trump says the trade deal with China is "intact" following an aide stating it was over.

  • Nasdaq Sends Second Delisting Notice to Luckin Coffee, Shares Sink
    FX Empire

    Nasdaq Sends Second Delisting Notice to Luckin Coffee, Shares Sink

    Luckin Coffee Inc announced that the Nasdaq has sent a de-listing notice to the company after it missed to file its annual financial report, dragging down its share about 85% since April.

  • Luckin Coffee discloses Nasdaq wants to delist the company
    TechCrunch

    Luckin Coffee discloses Nasdaq wants to delist the company

    It's the company that just can't catch a break! In a new SEC filing this morning Luckin Coffee, the embattled China-based and American-listed coffee chain that has become embroiled in scandal, announced that the Nasdaq really wants it gone. According to the firm, the Nasdaq exchange where Luckin is listed sent "an additional written notice [...] indicating that the Company’s failure to file its Form 20-F for the period ended December 31, 2019 [...] serves as an additional basis for delisting the Company’s securities from the Nasdaq," adding that this new notice "is in addition to the two bases cited in the written notice issued" that the company had disclosed in mid-May.

  • GlobeNewswire

    Luckin Coffee Receives Delisting Notice from Nasdaq for Failure to File its Annual Report

    Luckin Coffee Inc. (the “Company”) (LK) today announced that on June 17, 2020, it received an additional written notice (the “Notice”) from the Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company’s failure to file its Form 20-F for the period ended December 31, 2019 (the “Annual Report”) serves as an additional basis for delisting the Company’s securities from the Nasdaq pursuant to Nasdaq Listing Rule 5250(c)(1). This Notice is in addition to the two bases cited in the written notice issued by the Listing Qualifications Staff as disclosed by the Company on May 19, 2020.

  • GlobeNewswire

    Luckin Coffee Received Notification from Mr. Tianruo Pu of his Resignation as an Independent Director

    The Company received a letter of resignation dated June 16, 2020 from Mr. Tianruo Pu, under which Mr. Pu notified the Company of his resignation from the Board due to personal reasons, effective immediately. Following Mr. Pu’s resignation, both of the Audit Committee of the Board and the Special Committee of the Board consist of Mr. Sean Shao and Mr. Wai Yuen Chong, with Mr. Sean Shao serving as chairman.

  • Chinese E-Commerce Giant JD.com Climbs 6% in Hong Kong Debut
    Bloomberg

    Chinese E-Commerce Giant JD.com Climbs 6% in Hong Kong Debut

    (Bloomberg) -- JD.com Inc. soared about 6% in its Thursday debut in Hong Kong, a solid start that underscores strong investor appetite for a growing line-up of Chinese tech giants seeking to list closer to home.The Chinese online retailer, which already has stock listed in the U.S., opened at HK$239 after raising $3.9 billion in its Hong Kong share sale. That’s after its shares changed hands in gray markets at a roughly 5% premium to its HK$226 listing price in the days prior.JD debuts as tensions between Washington and Beijing threaten to curtail Chinese companies’ access to U.S. capital markets, particularly after once high-flying Luckin Coffee Inc. crashed amid an accounting scandal. It’s a victory for Hong Kong, coming on the heels of Alibaba Group Holding Ltd.’s $13 billion share sale and the passing of a national security law that critics fear could jeopardize its status as a financial hub. Fellow internet giant NetEase Inc. gained 6% in its own Hong Kong coming-out party last week.“We hope investors from China and Asia can better understand JD’s concept, service and future development,” JD Retail Chief Executive Officer Xu Lei told Bloomberg Television. “Hong Kong is one of the freest economies in the world. We hope to have many mature institutional and individual investors share JD’s growth.”Read more: Alibaba, JD Test Virus Recovery With Online Sales ExtravaganzaJD and its rivals will now put China’s nascent consumer spending recovery to the test when they wrap up the country’s biggest online shopping gala of the post-pandemic era. China’s largest retailers are hoping the “6.18” or June 18 extravaganza that began this month unleashed pent-up demand, making up for lost sales during a coronavirus-stricken March quarter.Global brands and smaller merchants alike stocked up on goods for months in anticipation of the summer event, a bargains buffet surpassed only by the Nov. 11 Singles’ Day in scale. JD and Alibaba are expected to release final results of their haul after midnight.Longer term, the company will use the proceeds of the stock sale to continue building its logistics and delivery network, a key advantage during the pandemic because JD could better control shipping.“The process to build up a supply chain is very time consuming and cost consuming, but we want to make it better,” Xu said. “When we have better supply chain, it would bring in a better user experience.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Banks Face $300 Million Shortfall on Luckin Margin Loans
    Bloomberg

    Banks Face $300 Million Shortfall on Luckin Margin Loans

    (Bloomberg) -- Banks including Credit Suisse Group AG and Morgan Stanley face a $300 million shortfall on margin loans to the embattled founder of Luckin Coffee Inc.The lenders, which also include Haitong International Securities Group and Goldman Sachs Group Inc., raised about $210 million over the past two months selling Luckin shares that Chairman Lu Zhengyao had pledged as collateral, people familiar with the matter said. Lu defaulted on $518 million of margin debt in early April, Goldman said in a statement at the time, after revelations of accounting fraud caused the Chinese coffee chain’s stock to plunge.The share sales represent the latest attempt by Lu’s creditors to limit losses from a scandal that has fueled calls in Washington for tougher scrutiny of financial ties between the U.S. and China. Luckin’s fall from grace blindsided some of the biggest names on Wall Street just as they were gearing up for a historic expansion into Asia’s largest economy.Spokespeople for the lenders declined to comment. Luckin didn’t immediately respond to multiple requests.Goldman, tapped by lenders to oversee the stake disposal, said in April that it would sell as many as 76.35 million of Luckin’s U.S.-listed shares. The firm has now liquidated the entire position, one of the people said, asking not to be identified discussing private information.A back of the envelope calculation suggests the shares were sold for $2.75 apiece on average. That compares with the closing price of $26.20 before the Luckin scandal emerged and the $3.18 average price since April 6, when Goldman announced plans to offload the stake.Luckin gained 8.3% to $4.32 in pre-market trading as of 5:12 a.m. in New York. The share sales by banks remove one potential overhang for the stock.Credit Suisse and Morgan Stanley each put up about $97 million for the margin loans, while Haitong International lent about $134 million, one of the people said. Goldman and Barclays Plc lent $73 million and $78 million, respectively, while China International Capital Corp. contributed $39 million.It’s still unclear whether the banks will ultimately lose money on the loans. They’re also pursuing the assets of an investment company controlled by Lu’s family trust, Bloomberg News reported last month. The investment company has disputed that it’s in default and has requested an injunction in Hong Kong to prevent liquidation proceedings, according to a May 6 court filing.Lu became a billionaire after his fast-growing Starbucks rival went public in the U.S. last year. But much of his wealth has since been wiped out by the 85% plunge in Luckin’s stock since April, when the company disclosed that some of its employees may have fabricated billions of yuan in sales.Chinese regulators have obtained emails purporting to show Lu instructed financial fraud, business news outlet Caixin reported this month, citing unidentified people close to the agencies. Regulators found evidence of fraud at Luckin in their investigation, Caixin cited several people as saying.Lu has previously denied deceiving investors. “My personal style may have been too aggressive and led the companies to run too fast, which has triggered many problems,” he said in a statement last month. “But I never lied to investors with the idea of ‘selling concepts.’ I’m working hard to make the company bigger and better to create value for society.”(Updates with pre-market gain in Luckin shares in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • GSX Techedu Stock Hits All-Time Highs Despite Ongoing Fraud Allegations
    Motley Fool

    GSX Techedu Stock Hits All-Time Highs Despite Ongoing Fraud Allegations

    Shares of GSX Techedu (NYSE: GSX) reached all-time highs on Monday, surpassing $50 per share. Short interest -- people betting against it -- is surging due to prominent fraud allegations. Research firms Muddy Waters and Grizzly Research have both issued detailed reports on why they believe GSX Techedu is making up most of its revenue.

  • Why Luckin Coffee Stock Just Bounced 10%
    Motley Fool

    Why Luckin Coffee Stock Just Bounced 10%

    After tumbling 15% in Thursday's broad-based market sell-off, shares of Chinese coffeehouse chain Luckin Coffee (NASDAQ: LK) are enjoying a bounce today -- up 10.5% as of 10:55 a.m. EDT. Honestly, there doesn't seem to be any reason for that, given that there's no news from Luckin, nor any news about Luckin, either. There are no analyst upgrades supporting the stock, nor is anyone suggesting that, after falling 82.5% in the past 12 months, Luckin deserves a higher price target.