Been reading about the Luckin Coffee saga which is just incredible.
A short thread ?
A short thread ?
For background, Luckin Coffee was started in 2017, and within 2 years had 5000 coffee stores in China, opening a new store every 3-4 hours at one point.
It went public on the NASDAQ in May 2019, less than 2 years after founding and its stock doubled within six months of its IPO.
It went public on the NASDAQ in May 2019, less than 2 years after founding and its stock doubled within six months of its IPO.
Then, in January 2020, an 89-page anonymous report was published which accused the company of fraud.
The authors hired 1500 people (!) to record 11,000+ hours of store traffic data and collected and analyzed 20,000+ customer receipts.
drive.google.com
The authors hired 1500 people (!) to record 11,000+ hours of store traffic data and collected and analyzed 20,000+ customer receipts.
drive.google.com
Luckin denied the report initially, citing the methodology of the report as flawed and the allegations as unsupported speculations.
Some short-sellers like Citron research defended the company publicly.
Some short-sellers like Citron research defended the company publicly.
And then a few days ago, Luckin Coffee announced that their internal investigations found that the COO and others fabricated transactions to boost revenue in 2019 by $300M.
The stock immediately dropped by over 80%. Wild.
The stock immediately dropped by over 80%. Wild.
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