April’s been a tough month for Luckin Coffee (NASDAQ:LK). The Chinese coffee company’s stock plunged on April 2 in light of an internal investigation into allegations of fraudulently fabricated transactions that involved a huge portion of its revenue during the last nine months of 2019. The share price remains more than 80% below where it traded on April 1.

In the wake of that scandal, Luckin is facing another challenge. Many law firms have sought to file suits against the coffee maker, making allegations of their own. With so much new litigation pending, it’s natural for Luckin shareholders to be worried about the lawsuits. However, experienced investors know that lawsuits like this often pop up when a company faces a controversial situation.

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