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Why Did Shares of Luckin' Coffee (LK) Crater 80% Today?
On Thursday, China-based coffee chain Luckin’ Coffee disclosed an internal investigation that found that its COO, Jian Liu, fabricated 2019 sales numbers by roughly 2.2 billion yuan ($310 million).
Liu and several employees that reported to him have now been suspended
Luckin’ was founded in 2017, and had hoped to overtake Starbucks (SBUX - Free Report) as China’s number one coffee chain.
LK went public last May, raising $561 million in its IPO. Shares peaked at $51.38 in January, but hit an all-time low of $4.90 a share Thursday morning; shares crashed 80% in pre-market trading. Just today, Luckin’ has lost almost $5 billion in market value.
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