is in more trouble. This week, new details on the Chinese coffee chain’s accounting practices are unfortunately dominating headlines. Why?To get more news about luckin coffee, you can visit shine news official website.

Under previous company management, executives purportedly juiced financials by creating vouchers to sell to fake buyers connected to the company. Millions in fake revenue was reported to boost the company’s growth metrics and impress shareholders.
To complicate things further, the company’s newly audited financial statements reveal $140 million in charges for raw materials within just a few months. This number is astronomically high compared to similar business models, pointing to more dishonesty and potentially theft.
New executives have been brought in the turn the tide; it remains to be seen whether they can do so. It will take time to fully recover from the investor distrust blossoming from this, and new problems keep popping up.

According to reporting from The Wall Street Journal, this company’s scandalous behavior began far before its IPO; it took time for the events to be uncovered.

Fraud pushed Luckin’s stock from penthouse to doghouse in a short period of time. From an investor perspective, the news led to trade halting on American exchanges. The stock rapidly erased 90% of its value upon shares reopening.

Pensions, brokerages, and retail investors globally were rocked by this shocking fraud. Today merely brings new details depicting severe malpractice by the company. Luckin has more work to do.
Luckin Coffee’s stock crashed in April after the company disclosed that it was investigating its chief operating officer for allegedly inflating sales by hundreds of millions of dollars. Several weeks later, Luckin fired COO Jian Liu and CEO Jenny Zhiya Qian due to their alleged roles in the scandal.

Then on May 19, Luckin received a delisting notice from Nasdaq, citing the company’s fabricated sales transactions and investors’ concerns about them. Luckin requested a hearing, which is expected to occur in approximately 30 to 45 days.

The stock resumed trading on May 20, ending a trading halt that Nasdaq had enacted on Luckin’s shares on April 7 after news of the accounting scandal broke. Luckin’s stock price went on to plunge further once more investors had the opportunity to sell their shares.Despite the stock’s devastating losses in recent weeks, there’s a strong possibility that even more pain could lie ahead for Luckin Coffee’s shareholders. Some investors, such as Quo Vadis Capital president John Zolidis, believe that the end result of the company’s accounting scandal could be a "complete wipe-out for equity holders.”

"Leaving aside the fraud, the figures that are available suggest that Luckin Coffee never had a viable business model,” Zolidis told MarketWatch on Thursday. "The company grew too fast and acquired customers via promotional offers, without ever proving the economics.”

To Zolidis’ point, Luckin Coffee has failed to generate sustained operating profits during its short life as a public company — and with its mounting losses, it’s possible it could descend into bankruptcy before it’s ever able to do so.

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