Luckin Coffee Stock Plunges After Company Suspends COO, Alleges Fake Transactions


China’s Luckin Coffee (ticker: LK) saw its stock plunge about 80% at Thursday’s open after its board alleged that a top executive fabricated millions of dollars worth of transactions last year—essentially rendering financial statements and guidance for 2019 unreliable.

In a statement released on Thursday, the board said an internal investigation found that Luckin’s Chief Operating Officer Jian Liu, along with several employees reporting to him, fabricated transactions worth as much as 2.2 billion Chinese yuan ($310 million) from the second quarter to the fourth quarter of 2019. The number hasn’t been independently verified by the special committee, said the company, and is subject to change as investigation proceeds.

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