NASDAQ

Luckin Coffee fired CEO over reporting fraud

Summary

Luckin Coffee Fraud Explained! What ACTUALLY Happened! Description video: Luckin Coffee is an example of quick-to-IPO companies that don’t have all of its processes ready. In this video we discuss the founding by Jenny Qian and the deep involvement in […]

Luckin Coffee Fraud Explained! What ACTUALLY Happened!

Description video:
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Luckin Coffee fired CEO over reporting fraud

Luckin Coffee fired its CEO after Chinese rival Starbucks was revealed to have fabricated a sales report.

Jenny Zhiya Qian and chief operating officer Jian Lu were fired on Monday. Lou was the main organizer of the commission fraud securities and exchanges.

The company said that the work of the chief operating officer was suspended after it was discovered that he had fabricated several transactions and reports. As a result of misconduct, the company had approximately 2.2 billion fictitious yuan on its balance sheet between Q2 and Q4 2019..

Luckin Coffee fired CEO over reporting fraud

Jini Guo, Senior Vice President and Member of the Board of Directors, was named Acting CEO.

Investors were initially very interested in the Luckin brand, which placed its securities in the USA in May 2019 years, showing strong revenue growth and even displacing Starbucks in the Chinese market. As of the end of last year, the company had 3,680 outlets, which is 200% more than a year earlier..

But the company’s future remains highly uncertain. Operations with her shares were suspended on the Nasdaq on April 6 after the company first disclosed inflated earnings. After that, the securities fell in price by 75% and have not been traded since..

It was rumored that the stock would eventually be delisted, and Luckin Coffe could even file for bankruptcy.

However, some Chinese consumers support the brand. Mobile data analytics Apptopia company announced that the daily download of the Luckin app on iOS hit a record shortly after the company uncovered accounting violations.

On social network Weibo, Chinese users actively support the coffee chain.

Luckin shares traded at $ 4.39 a share before trading was halted. That’s nearly 75% below the IPO price of $ 17, and 90% off the January peak of $ 51.