Shares of Luckin Coffee fell Wednesday after the coffee chain reported wider losses than expected, as it expands rapidly and discounts its drinks in a bid to challenge Starbucks for control of the Chinese coffee market.
Luckin shares dropped nearly 15% in morning trading. The stock, which has a market value of $5.8 billion as of Tuesday’s close, had gained 37% since the company’s initial public offering in May. Since Luckin was founded less than two years ago, it has grown to nearly 3,000 stores, making it the number two coffee chain in China behind Starbucks. Starbucks’ stock, which has a market value nearly 20 times larger than Luckin’s, is up 21% since Luckin’s market debut.