Why Luckin Coffee Stock Is Falling Today
Shares of Luckin Coffee (NASDAQ: LK) declined on Thursday after a key rival warned of heavy losses in the coming quarters. As of 11:33 a.m. EDT today, Luckin's stock was down more than 15%.
It's been a rough few months for Luckin and its long-term investors. After the Chinese coffeehouse chain disclosed on April 2 that it had fabricated as much as $310 million in sales from the second quarter of 2019 to the fourth quarter, its stock plummeted. In the weeks that followed, Luckin's CEO and chief operating officer vacated their positions due to their alleged involvement in the scandal, and the company's chairman will reportedly face criminal charges in China for his role in the fraud. Today, Luckin's stock price is down roughly 85% from the level it traded at before news of the accounting scandal broke.
But shares are actually up approximately 170% from the lows they reached in May. Some investors are betting that the company will eventually recover from these incidents and that its business still holds value.
Source Fool.com
