Luckin Coffee Burns Investors in 43% Plunge From High After IPO





(Bloomberg) -- Luckin Coffee Inc.'s initial public offering was met with great fanfare -- and then it wasn't.

Shares of Xiamen, China-based Luckin Coffee soared as much as 53% to $25.96 on May 17, their first day of trading in the U.S.

Since then, the stock has plunged 43% as investors question the company's sacrifice of profits in favor of a costly homeland expansion strategy, at the same time as the rocky China-U.S. trade relationship weighs on global markets.

Of this year's initial public offerings that raised at least $500 million, Luckin's 13% decline from its offering price of $17 per share makes the coffee retailer the second-worst performing stock, behind only Lyft Inc., which is down 20% since its offering price of $72 in late-March.

Hedgeye analyst Howard Penney is among the market watchers fooled by the Luckin. Last week, Penney projected 50 percent upside for the stock.

To contact the reporter on this story: Janet Freund in New York at jfreund11@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

COMMENTS

More Related News

WeWork Is Likely to Delay IPO After Valuation Plummets
WeWork Is Likely to Delay IPO After Valuation Plummets

WeWork, with its estimated valuation crashing, is likely to postpone its public listing until at least October, according to people familiar with the matter. No final decision has been made and the timing could still change, said the people, who asked not to be identified because the deliberations weren't public. Representatives for New York-based WeWork didn't respond to a request for comment.

India
India's Reliance Communications' Unit Files for Bankruptcy

A unit of Reliance Communications Ltd., Anil Ambani's distressed telecom firm, has filed for bankruptcy protection. GCX Ltd., which owns the world's largest private undersea cable system, is the latest company owned by the tycoon to stumble. The former billionaire's Reliance Communications itself fell back into bankruptcy earlier this year.

The Oil Market
The Oil Market's Reaction to Saudi Arabian Attack in Five Charts

It surpasses the loss of Kuwaiti and Iraqi supply during the Gulf War in August 1990, and the hit to Iranian output in 1979 from the Islamic Revolution, according to the International Energy Agency. The price gap between Brent for delivery this November and December 2020 doubled from $3.57 a barrel at the close of trading Friday to more than $7 on Monday. Calls on West Texas Intermediate crude futures are pricier than puts for the first time since 2018.

U.S. Stock Index Futures Slide After Oil Jumps on Drone Attack
U.S. Stock Index Futures Slide After Oil Jumps on Drone Attack

S&P 500 Index futures expiring in December dropped as much as 0.8% as of 9:25 a.m. in Singapore. Brent crude soared as much as 19.5% and West Texas Intermediate added 15.5% after the news of the attack on the world's largest crude exporter. The Saudi Arabia attacks will likely hurt Asian stock markets today with the S&P e-mini futures already lower, Jeffrey Halley, a market analyst at Oanda Asia Pacific Pte, wrote in an email.

Oil Soars, Yen Gains After Saudi Oil Field Attacks: Markets Wrap
Oil Soars, Yen Gains After Saudi Oil Field Attacks: Markets Wrap

(Bloomberg) -- Oil surged along with the yen and Treasury futures after a strike on the heart of Saudi Arabia's oil production increased geopolitical risk concern. U.S. equity futures declined, while shares in Asia opened flat.Brent crude soared 13% and West Texas Intermediate added 12%. News of the

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.