Topic: How To Invest

Power Growth Investor Hotline – Friday, April 3, 2020

Article Excerpt

LUCKIN COFFEE (ADR), $5.38, is now a sell. The company (symbol LK on Nasdaq) is a Chinese coffee shop chain, that continues to expand rapidly in that country. In May 2019, Luckin sold shares of its stock to IPO investors at $17 a share. The stock jumped to as high as $51.38 in January of this year—but this week it plunged from around $26 to today’s price. The drop came on news that the company’s board of directors is investigating reports that senior executives and employees engaged in financial misconduct. Luckin is looking into allegations that chief operating officer Jian Liu and other employees reported faked sales transactions amounting to $310 million. The company has suspended Mr. Liu and other workers it said were implicated and it has cut ties with outside parties who were involved in the identified transactions. It has also formed a special committee of three independent directors to investigate the matter. In addition, Luckin has hired law firm Kirkland…