Luckin Coffee Is A Ticking Time Bomb That Might Explode Later This Month


Last time I wrote about Luckin Coffee Inc. (LK), I attracted a lot of criticism for suggesting investors who bought the stock at recent highs of around $50 should wait it out and see what happens. At the time of publishing the first article, Luckin Coffee stock had already plummeted to around $4, and I thought shares would bounce back because of its liquidity position and the revival of the Chinese economy. The store count of around 4,500, I noted, is not fictitious. The trading ban on the stock was lifted on May 20, and after falling dramatically, shares are now trading above $6 in the pre-market session on June 8 at the time of writing this article. Shares, indeed, have recovered faster than many investors thought it would, if at all. My first piece on Luckin Coffee was targeted at investors who bought the stock at recent highs.

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