Ouch I hope no one was in Lukin… down over 80% on fraud in the accounting.
I had looked at Luckin in the past and owned many Chinese stocks. I don’t own any now.
It might be best to steer clear of China for some time or limit your investments there. Accounting issues there have always been a concern and now you have major uncertainty about their Covid-19 numbers and state of their economy.
I had a very small <1% stake (closer to .2%). It’s sold now…wished I’d listened to Saul’s “I don’t buy Chinese stock” advise. I will now though…
I honestly believed in it at the time I purchased it…held it for a few months too…
I own LK; it represents 0.11% of my portfolio. Just a small starter position at about $27/share. So now I am the proud owner of more shares at $6.50/share. With numbers this inconsequential; either I’m looking like a genius in 2 years or an idiot. Either way, it doesn’t move the needle on the portfolio performance, so it was worth the dip at $6.50. Not a far way to fall to zero from that point.
I’m sorry if any of you guys got badly hurt with Luckin Coffee. I did try very hard to warn everyone about Chinese companies, due to my own experience with them. I hope that it was just a tiny position and a good learning experience.
I hope that it was just a tiny position and a good learning experience.
I made a $1.94 profit!
I hate that any of you had losses in this. Its one thing to lose money because of the market’s whim, or because you made a bad judgement, or just randomness. Its another thing to be intentionally misled and defrauded.
I hope those responsible will be held fully accountable and made an example of. I hope all of their ill-gotten gains are returned to the company and ultimately paid out as compensation for those who were harmed.
I did not take a position in LK, but I thought hard about it, and almost did. It would have been the third company I had invested in that had significantly fraudulent financials. Interesting, that all 3 were all ex-US companies.
I hope that people are made whole, although my experience is that people usually are not. We will have to see.
In the meantime, my sympathies for those of you caught up in this…
Interesting article :
"The secret operation got underway late last year. A small army of researchers were told to fan out across China, to cities big and small, to collect documents and videotape the activities of the prime target.
The organizers had a hunch that Luckin Coffee, China’s fast-growing challenger to Starbucks and a company traded in the U.S. stock market, was falsifying financial statements to exaggerate its sales. The organizer set out to prove it, deploying 1,510 investigators to count sales and record traffic at more than 600 of the company’s retail stores, one mobile phone video at a time.
A few months later, an anonymously written 89-page report landed on Wall Street and leveled one of China’s hottest startups. A pack of short-sellers — who backed the report’s harsh conclusions — pounced. They positioned themselves to profit from a collapse in Luckin’s stock price and began releasing more allegations of fraud, staggering the company just as the world was going into lockdown over the Covid-19 pandemic."