Luckin Coffee Scandal Auditor. Trading and car inc., a rental company founded by luckin coffee’s chairman, sank 54% in hong kong.”). Luckin coffee’s shares plunged 76% thursday, followed by a 16% drop to $5.38 friday.
Luckin coffee scandal sparks demand from chinese tech firms for auditors to check online metrics data. The auditor to luckin coffee said it bears no responsibility for the chinese coffee chain’s 2019 financial statements and what it called the company’s fraudulent misconduct. Now the stock trades at less than a third of its initial public offering price and is down more than 90% from a record high in.
The accounting firm said it uncovered the problems at china’s luckin coffee, which have hammered the starbucks challenger’s stock and cast doubt over a large part of the company’s sales last.
6 see, e.g., jeanny yu et al., luckin coffee scandal deals new blow to corporate china, bloomberg (“luckin coffee shares plunged as much as 81% in u.s. As of january 2020, it managed 4,507 stores and exceeded the number of starbucks stores in china. Also troubling was luckin's heavy spending to attract customers with free coffee and deep markdowns. In 2½ years, luckin rose from nothing to become china’s biggest coffee chain with 4,500 shops, outnumbering starbucks in the world’s most populous country.