Luckin Coffee craters 45% after month-long trading halt as traders sell ahead of stock delisting
- Luckin Coffee cratered as much as 45% on Wednesday after a month-long trading halt on the stock was lifted.
- The company was originally halted on April 7 after it announced that senior executives fabricated as much as 2.2 billion yuan ($310 million) in sales last year.
- Luckin received a delisting notice from the Nasdaq exchange on Tuesday, but the company plans to request a hearing to fight the delisting.
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Luckin Coffee crated as much as 45% on Wednesday after a weeks-long trading halt on the stock was lifted.
Luckin stock was originally halted on April 7 after it announced that senior executives fabricated as much as 2.2 billion yuan ($310 million) in sales last year. The company recently fired its CEO and chief operating officer, citing fraud.
On Tuesday, the company received a delisting notice from the Nasdaq exchange. The exchange's staff cited "public interest concerns" surrounding the accounting discrepancies, as well as past failure to disclose critical information, for its delisting recommendation.
Luckin plans to request a hearing with Nasdaq to fight the delisting.
Shares of Luckin are down more than 95% from its January 17 peak of $51.38.
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Luckin was viewed as a strong competitor to Starbucks in China, as the country was able to rally around a homegrown version of Starbucks. But since the accounting fraud scandal, intense scrutiny has been put on Chinese stocks and IPOs.
President Trump said last week that the US would look at potentially implementing rules that would prevent Chinese companies from going through with an IPO on US exchanges without using US accounting standards.
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