Things had been going well for Luckin since it IPO’d last May at $17 with a market value of $531M. The discount coffee company was exploding all over China (not unlike another...ahem... issue China had over the last few months) and became a legitimate threat to Starbucks, after reporting 4.5k stores as of January 2020. Heading into January of this year, Luckin’s share price was as high as $51.87.
Short-seller Muddy Waters Capital received an anonymous report that fraudulent sales had been reported earlier this year. The China-focused research firm posted the report on Twitter and formally accused Luckin of fraud, which the company denied.
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