SBUX - 3 Things Luckin Coffee Bulls Need to Happen Soon
Luckin Coffee (NASDAQ: LK) has been one of the most infamous stocks of 2020, as the Chinese coffee company got itself embroiled in fraudulent accounting practices the full extent of which still aren't entirely known. After having had suspended trading in the stock for more than a month following the scandal, Luckin stock has been extremely volatile. Although most had anticipated the sizable decline immediately following the reopening of stock trading on Luckin, a big rebound over the past few days has highlighted the fact that some bullish investors still have hope for the stock.
As dire as things look for the coffee stock right now, there is a bullish argument for Luckin. It's not a foregone conclusion that the company will cease to exist and make its stock worthless. Nevertheless, for Luckin to start to mount a long-term recovery, it needs to have several positive things happen. Below, we'll look at the key ingredients to drive the Luckin bullish argument.
The accounting scandal called into question Luckin's financial results for the first nine months of 2019. Right now, investors don't have a clear read on exactly what the company's real financial performance has looked like for nearly a year and a half, and that makes it impossible to assess Luckin's true growth trajectory and future prospects.