Earlier this month, Luckin Coffee (NASDAQ:LK) got a huge lift thanks to news of its new smart vending machine strategy. However, after reaching a price of more than $50 on this news, LK stock is now down 20% to ~$40 on virus fears.
With the coronavirus outbreak in Wuhan, China, currently having infected nearly 6,000 people worldwide, many investors have started to shy away from Chinese stocks like Luckin Coffee.
Although concerns of the virus’ impact are certainly justified, we should still question whether it’s time to dump LK stock.
Do the current risks outweigh its potential for success?