China's Luckin Coffee to delist from Nasdaq

Marco Green
June 29, 2020

A customer waits at a Luckin Coffee in Beijing January 14, 2019.

Luckin Coffee, a Starbucks rival in China, will be delisted from the Nasdaq stock market in the USA on Monday following a massive fraud scandal that sent its share price plummeting.

Luckin, which has already fired its chief executive and chief operating officers, said the special committee running the internal probe into the fraud had recommended Lu's removal based on evidence from its investigation and the chairman's degree of cooperation.

They have already lost almost 90 per cent of their value since Luckin disclosed an internal probe against the chief operating officer for overestimating as much as 2.2 billion yuan in 2019 sales.

China's Luckin Coffee (NASDAQ: LK) announced on Friday that it has withdrawn its hearing request to the Nasdaq's Board of Directors and will suspend the trading of its shares at the open of business on June 29, 2020.

Luckin said on Saturday that despite its delisting from the Nasdaq, more than 4,000 of its domestic stores in China will continue their normal operations.

Luckin, founded in 2017, raised US$645 million (RM2.77 billion) in its United States initial publlic offering (IPO) a year ago and counted BlackRock Inc among its backers.

Shares of Luckin plunged more than 50% to about $1.40 on Friday, giving the stock a market value of 348 million USA dollars.

By the end of a year ago it had more outlets than Starbucks and investors had touted the company's potential to go global.

The company will hold a meeting next month to consider the dismissal of several members of its management team.

Other reports by Click Lancashire

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