The stock was up ana 2 gui. Eastern time. There is no time limit for how long a stock can be halted for pending news. Luckin's co-founder and chairman Lu Zhengyao is trying to distance himself from his other companies to limit the fallout, the Financial Times reported Wednesday.
China Auto executives told the newspaper that Lu would consider stepping down as chairman from the car rental company as a way to convince investors of the company's independence from Luckin. US coronavirus: Miami is now the coronavirus epicenter as cases surge, expert says.
Amazon's upcoming supermarket could be the first step in an ambitious plan to change the way we grocery shop — here's what we know about it so far. Luckin Coffee's stock has been halted for pending news since Tuesday.
China's Luckin Coffee sacks bosses amid accounting scandal
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I'm already a fan, don't show this again. Send MSN Feedback. How can we improve? Please give an overall site rating:. Privacy Statement.This copy is for your personal, non-commercial use only. Chinese cafe chain Luckin Coffee is delaying its reportciting the coronavirus pandemic and an internal investigation. Shortly after, a large Luckin shareholder sold all of its ADRs. On Wednesday, Luckin disclosed in form it filed with the Securities and Exchange Commission that it would miss the April 30 deadline for its annual report, which is filed on a F form.
The typical deadline for the form is four months after the end of the fiscal yearwhich for Luckin was Dec. In late March, the SEC extended reporting deadlines to 45 days after the original date for companies affected by Covid An internal investigation regarding the alleged fraud is also hampering the preparation of the financial statement.
Luckin decliend to comment on when the annual report would be filed, when its ADRs would resume trading, or the departure of Meier. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups. Write to Ed Lin at edward. Chinese cafe chain Luckin Coffee is delaying its report, citing the coronavirus pandemic and an internal investigation.
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All Rights Reserved This copy is for your personal, non-commercial use only.This copy is for your personal, non-commercial use only. The Nasdaq Exchange, where Luckin shares ticker: LK are listed, had halted the stock pending the release of material news. On Thursday, one more reason was added—the exchange is now requesting additional information from the company. A flurry of law firms have been calling for investors with significant losses to file class actions against the company.
Concerns were first brought to public attention by short seller Muddy Waters Research back in January, which said it was shorting Luckin shares after receiving an page anonymous report that accused the company of fraud.
Luckin Coffee denied the allegations at the time. Every weekday evening we highlight the consequential market news of the day and explain what's likely to matter tomorrow. To put that in perspective, Luckin had reported total revenue of 2. Luckin Coffee has over 4, locations across China, selling freshly-brewed coffee and other beverage products.
The listing was one of the biggest by a mainland Chinese company in the U. A few more Chinese companies have since been accused of fraudincluding video-streaming platform iQIYI IQ and online tutoring company.
Tal Education has said an employee inflated sales figures. Luckin reported total revenue of 2. Write to Evie Liu at evie. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at or visit www. We've detected you are on Internet Explorer. For the best Barrons. Google Firefox.
Text size. Newsletter Sign-up. Thank you This article has been sent to. Privacy Notice. Cookie Notice. Copyright Policy. Data Policy.The stock has been halted since April 7, shortly after the company revealed that its COO, along with several others at the Chinese coffee-brewing chain, were cooking the books.
I'm still a stakeholder because I can't sell my stock. If you own it, you're in my boat. No one's getting in for now. No one's getting out for now. It's a time capsule of corporate greed and shareholder regret, waiting to be unlocked the moment that the exchange allows Luckin Coffee to start trading again. Costs and expenses were also inflated substantially.
Luckin's now bogus numbers were hypnotic. Luckin Coffee's store count of 3, at the end of September -- a number the preliminary audit isn't disputing -- was more than triple the number of outlets it had available a year earlier. Luckin Coffee isn't Starbucks. It offers small kiosks that lean largely on mobile order and cashless transactions. The locations are cheap to set up and can be staffed lightly, designed for a high volume of low-ticket purchases.
It seemed like the perfect way to disrupt Starbucks' takeover of China: betting on mobile-savvy consumers who would lean on the app and canvassing the country with more locations to make things even easier.
Luckin seemed to be doing things right in giving China a hometown hero it could root for, and the number of average monthly customers had soared nearly fivefold to 9. It had launched Luckin Tea as an independent brand to cash in on China's iconic warm beverage of choice.
Now, Luckin is a cautionary tale that will sting the next hot Chinese growth stock with numbers that seem too good to be true. Does that mean it will get going again the moment Luckin files its fourth-quarter results and restated financials for the entire year?
Is there another shoe yet to drop? Your guess is as good as mine at this point.
Luckin Coffee Remains Halted
It's not just the U. More than a dozen officers from China's top business and commerce regulatory agency raided Luckin's headquarters over the weekend. The stock remains halted, but Luckin Coffee isn't worthless. It's not going to zero unless the numbers are far worse than the initial read. The stores remain open, and folks are still firing up the Luckin app to order a warm brew.At the time of this writing, the stock had not resumed trading, and it's unclear what the pending news is.
However, there are some possibilities. Goldman was one of those banks. Q1 hedge fund letters, conferences and more Almost million shares of Luckin Coffee stock were put up as collateral for the loan, according to Goldman Sachs. The investment bank said the lenders have begun the enforcement process against the collateral in connection with the default on the loan. Goldman also said that if the syndicate of banks sold all the pledged shares, Qian's voting rights in the coffee chain would "decrease significantly.
The following day, the stake fell to zero. However, Chanos closed the position on Thursday. China Daily reports that Luckin Coffee faces the possibility of delisting after it reported the fabricated sales. Dong Dengxin of the Wuhan University of Science and Technology's Finance and Securities Institute told the news outlet that in addition to delisting, the company may face a class-action lawsuit filed by shareholders.
The result of that lawsuit could even go as far as bankruptcy. In addition to civil compensation, Dong said the company could also be saddled with criminal and administrative fines.
Further, the employees found to have fabricated the sales could even go to prison. Luckin Coffee said last week it had suspended the employees that were involved. For now, it definitely looks like trading on Luckin Coffee stock has been halted, but it's unclear why. However, Ucar, of which Luckin Chairman Lu is the biggest shareholder, has also halted trading of its stock. According to Reuters via Yahoo!
FinanceChinese regulators questioned Ucar about how the fraud allegations against Luckin Coffee would affect it. Ucar officials decided to halt trading in their stock to avoid abnormal price fluctuations.
Disclosure: No positions. Related Quotes. Luckin Coffee Inc. Sign in. Sign in to view your mail. Finance Home. Insider Monkey April 13, Recently Viewed Your list is empty. What to Read Next. Motley Fool. Yahoo Finance Video. Yahoo Finance. Schaeffer's Investment Research. LK Luckin Coffee Inc.All rights reserved.
Charles St, Baltimore, MD Current shareholders cannot sell their LK stock. Or any potential would-be buyers cannot buy into the share price. If you are a current investor in Luckin Coffee stock, you probably are quite well aware that the company is being accused of having fabricated sales figures. The Xiamen-based company started operations in Oct. In MayLK stock went public in the U. According to the U. Securities and Exchange Commission:.
ADRs allow U. Many non-U. The first ADR in the U. In China, listing requirements are quite strict and lengthy. Chinese stock exchanges would have required Luckin to have been profitable over the three years prior to the proposed IPO date.Luckin Coffee Stock (LK) HALTED - WHY? - What has REALLY happened and what's NEXT??
In other words, it could have not listed in China. The group possibly initially chose the U. But the story has changed since then. It also urged investors to not rely on its previous financial statements for the nine months ended September 30, Jian Liu, the chief operating officer and a director of the Company, and several employees reporting to him, had engaged in certain misconduct, including fabricating certain transactions.
Now it is easy to realize why the people named could have wanted to pump the share price, especially at the time. On April 27, the headquarters of the scandal-hit chain was raided by regulators in China. Could Chinese authorities be nervous that this scandal may tarnish the reputation of other Chinese companies listed in the U.
Indeed on April 21, the SEC put a public statement that warned investors on various risks due to investing in companies from emerging countries. It said.These are external links and will open in a new window. China's Luckin Coffee has sacked two of its top bosses after new evidence came to light about an accounting scandal. The firm said its chief executive and chief operating officer were fired after a probe into hundreds of millions of dollars worth of fake transactions.
Six other employees who were alleged to have been involved in or known about the transactions have been suspended or put on leave. Chief executive Jenny Zhiya Qian had run the company since Novemberwhile Jian Liu had been in charge of its operations for the last two years.
The scandal-hit firm said it has been co-operating with regulators in the US and China, who began an investigation into the company last month. The Chinese coffee chain, which was founded indescribed itself as "a pioneer of a technology-driven new retail model to provide coffee and other products of high quality, high affordability, and high convenience to customers". According to its own figures it had rapidly expanded to have more than 4, outlets by the end of last year.
Luckin shocked Wall Street when it said investors could no longer rely on previous financial statements that had appeared to show rapid growth. As late as February this year the company had strongly denied what it called "misleading and false allegations" about its finances. The accounting scandal at Luckin is seen as clouding the prospects for other Chinese companies considering selling shares in the US.
The firm's shares were suspended from trade on 7 April. The Nasdaq exchange said the shares would remain halted until Luckin had fully satisfied its request for additional information. The government is also banning telecoms firms from buying new Huawei 5G kit after 31 December. China's Luckin Coffee sacks bosses amid accounting scandal 13 May Image copyright Getty Images China's Luckin Coffee has sacked two of its top bosses after new evidence came to light about an accounting scandal.
Luckin was China's rival to the world's biggest coffee chain, Starbucks. Related Topics Starbucks China Coffee.
More on this story. Luckin Coffee: Scandal-hit chain raided by regulators in China. China's Luckin Coffee slumps on 'fake' data news. Elsewhere on the BBC. Daily news briefing direct to your inbox Sign up for our newsletter. Why you can trust BBC News. Politics Home Parliaments Brexit.