Last Thursday, Chinese coffee brand Coffee Box published an article explaining why it stayed silent despite the market rumors and how its future business models will be deployed.
Luckin Coffee Inc. reportedly achieved positive cash flow per store in July, except for roughly 300 stores located at universities that have been closed due to the COVID-19 pandemic.
Luckin Coffee appointed Guo Jinyi, a board director and former acting CEO, as chairman and CEO in replacement of its co-founder and former chairman Charles Zhengyao Lu.
Luckin Coffee announced Wednesday that an internal investigation of its financial misconduct found the company inflated its 2019 net revenue by approximately 2.12 billion yuan ($300 million).
Shares of Chinese coffee chain Luckin Coffee dropped 17 percent during premarket trading on Tuesday after the company announced it received a delisting notice from Nasdaq.
UCAR Inc announced Wednesday that all 270 million shares held by Chairman Lu Zhengyao have been judicially frozen by the Beijing First Intermediate People's Court until April 2023.
While authorities found Luckin Coffee Inc paid taxes on bogus transactions, its CEO said their business model is correct and willing to participate in any investigations.
Luckin Coffee shares took a 36% dive on Wednesday after the company resumed trading on Nasdaq, following a delisting notice from the exchange on grounds of financial fraud.
Having faked its revenue numbers, Luckin became a laughing stock of a unicorn, with analysts on both sides of the pond contemplating over what outcomes this situation will have on a larger scale for Chinese businesses abroad.
The CSRC has sent an investigative team to inquire into fraud allegations against Luckin Coffee. Several auditors are currently inspecting Luckin’s financial situation.
