Luckin Coffee will unluckin’ly delist from Nasdaq following fraud allegations – TipsClear
It was one of the fastest growing startups in modern history and one of the most anticipated IPOs of 2019. But now, after the company’s hundreds of millions of dollars of possible fraudulent revelations, Lakin’s journey is beginning to meet its end.
The company said in a statement filed with the SEC today that it would not hold back Nasdaq’s decision to remove the company from the market after receiving two notifications in recent weeks on the stock exchange. It will officially stop trading on Tuesday morning, meaning that Monday is your last day for trading LK, at least for the time being.
Lakin’s saga was exceptionally exciting. There was barely a two-year-old startup here launching coffee “shops” and delivering coffee cups faster than international incumbent Starbucks in China, despite a multi-decade forest in the mid to late The total was surpassed. Local Chinese consumers tried to convert from traditional tea culture.
This growth led to a huge surge of interest from Wall Street for the company’s debut last year, and the company’s stock rose, as its growth reached its more difficult heights. There was just one problem: little of that development was clearly real.
This April, the company’s board began investigating a $ 300 million dollar fraud within its accounting books, finding that the company had essentially sold large-scale coffins for sale by affiliated companies. Increased which was never distributed. The strategy boosted sales figures and total transaction volume while helping the company’s margins look great (seriously, if you haven’t tried it, selling anything for a few is a great margin business). Of course, it is fraud when you place it on the 10-K form and submit it to the SEC.
This led to a huge jump in consumer downloads of the company’s app, as its customers tried to exchange their coupons and other giveaways for real coffee before the company collapsed.
Now, with the company’s current imminent, there are major concerns about the quality of accounting standards in the United States and around the world. The United States, through the Public Company Accounting Oversight Board, actually has limited ability to verify the company’s records in China, meaning fraud scams like Lakin have occurred repeatedly despite verification by auditors like EY, who That Lakin has an auditor.
Congress is now working on legislation that would require local access to company documents and metrics to clarify that there is clearly a black eye for American markets.
But Lucken’s fraud is not the only one that reached its peak this week. German fintech payment company Wirecard officially announced its bankruptcy in Munich’s court this week, which is likely to result in a harsh transaction of billions of dollars on the loan. It was a major failure for Germany’s innovation scene, where Wirecard was a rarity in the index of the country’s top 30 companies.
As for Lakin – more drama ensues. Banks are trying to find out what assets they can take from the company and its chairman Lu Zhengou. Maybe the company has more … luck ‘going forward.