Luckin Coffee (NASDAQ:LK) was poised to become the Starbucks (NASDAQ:SBUX) of China, after hitting a market capitalization of $3 billion in less than two years. Now the Starbucks comparison seems farfetched at best. Instead, LK stock now belongs in the company of disgraced organizations Worldcom and Enron.
Reports of murky accounting transactions and subsequent internal investigations halted trading of the company shares from April 7 to May 19. LK stock’s initial public offering price was $17 per share in May of last year. The stock reached a high of $51 a pop on January 17. Since then, it has shed 97% of its value.