QSR - As If Luckin Coffee Didn't Have Enough Trouble Tencent Is Now Coming After It
It might seem as if things couldn't get worse for Luckin Coffee (NASDAQ: LK). In early May, after its chief operating officer and other associated employees resigned amid allegations of fabricating meaningful amounts of Luckin's sales, Luckin's stock plunged and was subsequently halted for several weeks. During the trading halt, Luckin's CEO was later fired as well, as apparently a deeper malfeasance was discovered at the company in the meantime.
With the resumption of trading last Wednesday, Luckin's stock has continued to fall, plunging to just $2.13 as of this writing, an amazing decline from its all-time highs of $51.38 set in January of this year.
Luckin still faces the prospect of being delisted from the Nasdaq and will soon have a hearing, probably within the next month, to determine its standing. However, even if Luckin is permitted to maintain its listing on U.S. exchanges, the company still faces some severe questions. In fact, Quo Vadis Capital president John Zolidis thinks Luckin could be a "complete wipe-out" and has questioned if the company ever had a viable business model.