BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Luckin Coffee Inc. (“Luckin” or the “Company”) (NASDAQ: LK): (1) securities between May 17, 2019 and April 2, 2020, inclusive (the "Class Period"); (2) American Depositary Shares (“ADSs”) pursuant or traceable to the Company's initial public offering conducted on or around May 17, 2019 (the "IPO"); and/or (3) ADSs pursuant or traceable to the Company's secondary public offering of ADSs conducted on or around January 10, 2020 (the "2020 Offering"). Luckin investors have until April 13, 2020 to file a lead plaintiff motion.
Investors suffering losses on their Luckin investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
On January 31, 2020, Muddy Waters Research (“Muddy Waters”) published an anonymous report alleging that Luckin “had evolved into a fraud by fabricating financial and operating numbers starting in [the] 3rd quarter 2019.” Among other allegations, Muddy Waters claims that the “[n]umber of items per store per day was inflated by at least 69% in 2019 3Q and 88% in 2019 4Q” and that “Luckin inflated its net selling price per item by at least RMB 1.23 or 12.3%.”
On this news, Luckin’s share price fell $3.91, or nearly 11%, to close at $32.49 per share on January 31, 2020, thereby injuring investors.
Then, on April 2, 2020, before the market opened, Luckin disclosed that "beginning in the second quarter of 2019, Mr. Jian Liu, the chief operating officer and a director of the Company, and several employees reporting to him, had engaged in certain misconduct, including fabricating certain transactions." The Company further revealed that "the aggregate sales amount associated with the fabricated transactions from the second quarter of 2019 to the fourth quarter of 2019 amount to around RMB2.2 billion." As a result, the COO was suspended, and Luckin stated that previously issued financial statements should no longer be relied upon.
On this news, the Company's share price fell $19.80, or over 75%, to close at $6.40 per share on April 2, 2020, thereby injuring investors further.
The complaint alleges that defendants made false and/or misleading statements and/or failed to disclose: (1) that certain of Luckin’s financial performance metrics, including per-store per-day sales, net selling price per item, advertising expenses, and revenue contribution from “other products” were inflated; (2) that Luckin’s financial results thus overstated the Company’s financial health and were consequently unreliable and would likely require restatement; and (3) as a result, Defendants’ statements about Luckin’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Luckin securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.