LK - Luckin Coffee To Follow Scandal Stock Pattern
For the last few years, I've been following "scandal stocks" - companies that have rapid declines due to negative news with a moral component.
There's a cycle to these scandals. First, bad news comes out. Next, pressure on the stock builds as media reveal further problems and governments start investigating.
At some point (averaging about half a year), most of the bad news has come out and the stock turns back up. This often occurs before the final stage, when corrective action, such as a government fine, is taken.
Source: Author's spreadsheet
Will Luckin Coffee