Stocks

Luckin Coffee and Chinese Stocks

Luckin Coffee had an astronomical run.  The Starbucks of Asia was on a tear, creating a 4,500 store footprint in China faster in two years than Starbucks could achieve in a decade.  Their growth strategy?  Smaller square feet meant for express takeout and hardcore discounting – a recent promotion was buy 10 get 10 free.  Yes, 10X BOGO.  That is until the truth came out – the books were cooked, to the tune of $309 million in false revenue.

Bloomberg’s Nisha Gopalan says that “It’s a moment of truth and a wake-up call for investors who pile into Chinese startups that show meteoric growth rates.” (via Yahoo Finance)

As lawyers begin to swarm, app data is actually showing a surge in customer activity, but most think it has as much to do with nationalist sentiment as it does a rush to make sure that their coupons were honored — before the company goes bankrupt.

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