Luckin set two records for IPOs, listing on nasdaq in 18 months, the fastest on record, and the faster time it took 13 months to delist. On May 19th Luckin was asked to withdraw from NASDAQ after two de-listing notices, and on June 29th, after a $2.2 billion sale, Luckin suspended trading and began withdrawing from trading. That’s the end of a story?
Calm! Coupons are still available.
Luckin was shot down by an anonymous shorting report on Luckin published by Muddy Waters, which went through the essential denials and reversals of the storyline, and on April 2nd Luckin blew himself up for fabricating $2.2 billion in sales in the 2019 2019 quarter. Luckin fraud incident once the explosion, the store may be the fastest to feel the “waves”, in the spirit of “sheep” is still hurrying “stoic” idea, netizens all want to drink another 1.8 fold Luckin, even if it is the last cup, many consumers buy is four or five cups, stores lined up, and even caused system downtime.
Today, de-listing has been “pinned”, but consumers are calm a lot.
In the reporter visited several Luckin stores in Shanghai, there was no previous queue to buy the scene, nor did the store closed overnight.
In the reporter’s LuckinApp, lying on a 3.8 percent coupon, after the coupon was used, four more coupons came.
But there is no 1.8 percent discount or 3.8 percent of the strength of the big, to buy a cup of the original price of 28 yuan of Raina ice, for example, with 3.8 percent discount coupon spent 10.64 yuan. The Luckin menu also includes new products, such as the herena ice of pineapples, the floating cloud Dorina ice, and so on.
Dragon Boat Festival on the last day of the long holiday, reporters came to Pudong Zhangjiang a small deer tea store opened in a comprehensive shopping mall, surrounded by many communities and technology companies, 2 shop assistants in the production of tea.
A shop assistant who has worked here for most of the year told reporters that the order volume, workload and peace time is basically similar, “fake news after the two weeks of orders burst, the daily order doubled, has now returned to normal levels.” “
As for the news of Luckin’s de-listing, the clerk said that whether it is fraud or de-listing, will more or less affect the trust of the company, will worry about store closures, but now wages are normal, to see the situation decided.
At noon on June 29th, a Luckin store on southwestern Shaanxi Road was more popular, three shop assistants were busy, noon was peak time, for the de-listing, an employee also said, is still normal operation, “this store will close at the end of August, because the owner does not renew the lease, we will go to other new stores.” “
In addition to the store staff, the IT Times reporter learned from a Luckin internal employee that the position and salary have not changed. But the employee also told reporters that she does not own shares.
A company listing means that employees may become rich overnight because they own shares in the company.
At the beginning of 2019, Luckin provided an equity incentive to company executives, directors and employees, with 158,031 shares used to motivate employees who make significant contributions to the company, and 5 percent of the total share capital.
Based on Luckin’s market value of $4.25 billion at the time, the stock used for employee incentives was worth about $212.5 million, compared with a exercise price of $0.1, with a four-year unlock period and 25 percent unlocked each year.
Luckin’s last day on the Nasdaq on June 26th triggered a meltdown, down 54 per cent to $1.38, giving him a market capitalisation of $347m and a 5 per cent boost to less than $20m.
“Employees with options, on the one hand, are shareholders, but also employees, and may face double losses in their dual identities. Dong Yizhi, a lawyer at Shanghai Zhengze Law Firm, told the IT Times.
They may be the most injured.
or close some stores or change names to restructure
On June 27th Luckin said in a statement on its official microblog that more than 4,000 stores across the country would be operating normally and nearly 30,000 employees would be working.
But Luckin, which has always championed “fast”, has had to slow down, with media reports that only 186 new businesses have been added to Luckin coffee so far in 2020, with 80% fewer stores than in the same period last year.
Delisting does not amount to bankruptcy, and businesses can still operate normally, but Luckin, which relies mainly on capital to boost expansion and subsidies, is bound to have no thrust and can’t run.
“In the last two years after the de-listing, Luckin will face very great pressure in cash flow, financing channels will be very difficult, its low-cost strategy is far from balanced costs and expenses, even if not rent, labor, coffee and other raw materials are also loss-making, there are several, Luckin every cup of coffee sold to lose a dozen yuan.” Pan Andlin, executive director of the Institute of Digital Economics at Zhongnan University of Economics and Law, told the IT Times.
In mid-May, after receiving a de-listing notice from NASDAQ, Luckin Coffee had planned to hold a hearing to try to salvage the situation, and Luckin would remain listed on NASDAQ until the outcome of the hearing.
But on 24 June, Luckin withdrew the request for a hearing, which meant that he accepted the de-listing notice.
Mr Tung said that de-listing was only a matter of formality, the process would not be too delayed, and the completion of a de-listing form would mean saying goodbye to NASDAQ.
Luckin, who has enjoyed the high-gloss moment of the NASDAQ bell, has no capital, where does the “old man” go after eating?
Some people think that will move into the over-the-counter market, others think that the huge investment of the original shareholders are neither willing nor able to exit, shareholders may use a can not find a related shell company, with a very low price to buy Luckin store assets, equivalent to the name of Luckin, does not affect the store physical operation, while the shell-preserving Luckin will continue to deal with the subsequent litigation.
In Pan and Lin’s view, if there is no investor support, there will be a break in the capital chain, some stores will close, scale down, subsidies will not be as large as before, may retain some good location, high-revenue stores. Unless new money comes in, it’s going to be more difficult at the moment.
“Luckin is thinking about how to operate valuable assets, put valuable stores up and do, and the rest to give up strategically, which is a relatively good outcome. “
Investor class action is coming.
Store number, market share are the content of the story, no investors, the story will lose the value of existence.
De-listing, the wood has become a boat, but this is only luck fraud semicolon, not the end, the claim is under way, loss-making investors are preparing to go through legal proceedings to get compensation.
Luckin Coffee’s U.S. class-action lawsuit has named the lead plaintiff and law firm, Bloomberg reported.
Dong Yizhi’s law firm has also received a number of requests from individual Chinese investors, “we have not started the proceedings, we are still waiting for the attitude of several domestic and U.S. regulatory authorities, but we are also preparing to file a related lawsuit in this regard.” Mr Tung revealed that the amount involved by these investors was not small, but it was not convenient to disclose it and could not guarantee how long the litigation would take.
Under the Sabans Act, individuals convicted of fraud face up to five years in prison for intentional securities fraud, which carries a maximum penalty of 25 years in prison in the United States, in addition to fines.
Some lawyers believe that although Luckin is listed in the United States, but its main business in China, so that companies registered and operating in China to provide false financial reports, verified to be true, may face the Accounting Law, the Criminal Law, securities law and other charges.
Luckin Coffee was established by Lu Zhengyao’s Shenzhou Department, and the pre-financing came mainly from Lu Zhengyao’s company.
Earlier, it was reported that the relevant departments have mastered Lu Zhengyao for the company’s financial fraud of the directive e-mail, Lu Zhengyao will be prosecuted, most likely to face criminal charges.
Luckin Coffee Chairman Lu Zhengyao and company founder Qian Zhiya
Luckin’s infighting has also escalated, with Luckin saying on June 28th that most directors had asked Mr Lu to step down as chairman and director and that the board would meet on July 2nd to discuss the proposal.
Lu Zhengyao lost faith in the capital market, his time is over, has been unable to get to the front desk. Pan and Lin thought.
By Pan Shaoying, Writer/IT Times Correspondent
Photo/Pan Shaoying, Sky Eye, Luckin Coffee, Online