I'm going to post the rest of Motley Article for you
These people were highly recommending the stock. They are major share holders and now they're telling people to NOT buy it so, I'm scared of it .. If they owned it when they bought in back when it showed their recommedations and now they're telling people to not buy it, I'm a little scared yet .. That's just me but here's the aticle..
IT IS COPY PASTE NOT ME .. THIS IS THEIR VERSION CREDIT TO THEM NOT ME..
Updates on Luckin Coffee
Bill Mann May 20, 2020
CURRENT PRICE: LK $ 2.01 -$ 0.81 (-28.7%) Price as of May 21, 4:30 p.m.
Fools, we've had back-to-back news on Luckin Coffee (NASDAQ: LK) this week, so we wanted to notify you about it. Read below for our updates. For now, Stock Advisor is holding our shares. We do not see this as a buying opportunity.
Luckin Coffee to Be Delisted
On Tuesday, the Nasdaq (NASDAQ: NDAQ) stock market notified Luckin Coffee that it intended to delist Luckin shares based on its determination that maintaining a listing is not in the public interest.
Luckin intends to request a hearing with the Nasdaq to convince the exchange that it be allowed to remain. Typically these hearings take place in 30 to 45 days following the request, and the shares will remain on the Nasdaq in the interim.
As you know, this latest setback for shareholders stems from the April 2 disclosure from Luckin Coffee that Jian Liu, the chief operating officer, had been relieved of his position following the discovery that he had allegedly been involved in fabricating some $310 million in revenue over the prior year, which amounted to approximately 60% of total revenue during that time. Luckin has since fired its CEO, Jenny Qian, and several other people who either were involved in the fraud or failed to detect it.
The Nasdaq halted trading in Luckin on April 7 for pending news. There is no time limit for how long a company's shares can be halted. In 2001, for example, CalAmp (NASDAQ: CAMP) was halted for more than three months following disclosure that its controller had been hiding losses and liabilities for several years in order to meet investor expectations.
Luckin Can Resume Trading
After the market closed yesterday, the Nasdaq informed Luckin Coffee that its shares would be allowed to resume trading today.
The combination of the lack of accounting restatement from Luckin, the threat of delisting, and the forced selling by institutions whose mandate Luckin no longer fits is likely to crush shares of the stock today. In morning trading, shares are down more than 30% on massive volume.
We recognize that this is a nasty position for Fools who hold this stock, though for most, Luckin should now occupy a tiny portion of your portfolio. We DO NOT recommend that Fools buy shares of Luckin Coffee, no matter how cheap the stock looks. We will update our guidance as more information becomes available.
For the moment, all there is for us to do is wait. We are holding our shares in Stock Advisor for now.
Obviously, we are not happy about any of the developments at Luckin Coffee. It is an object lesson of a few principles that we have talked about at the Fool over the last three decades:
Plenty of companies — even ones that we love — are going to disappoint us.
Having a portfolio that's sufficiently diversified to withstand the inevitable disappointments is in your best interest.
These companies that do disappoint will, in the long term, be nearly meaningless. It's also true that even the most careful, accomplished investors can get caught up by a well-concealed fraud.
We will continue to issue updates on Luckin as news unfolds.
The Motley Fool owns shares of Luckin Coffee Inc. The Motley Fool has a disclosure policy.
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