Luckin was delisted from the Nasdaq in 2020 after the company overreported its revenue, resulting in a regulatory fine.
- China’s Luckin Coffee plans to relist its shares on a main U.S. exchange, although a timeline has not been defined yet.
- Luckin was delisted from the Nasdaq in 2020 after the company overreported its revenue, resulting in a regulatory fine.
- Luckin has lately expanded overseas, with cafe launches in Hong Kong, Singapore, and Malaysia.
China’s Luckin Coffee, a fast-emerging Starbucks challenger, plans to relist its shares in the U.S. after they were delisted five years ago following an accounting scandal.
Starbucks shares were up 0.2% in premarket trading on Wednesday.
Speaking at a government-hosted event in Xiamen, where Luckin is headquartered, CEO Jinyi Guo said that “under the municipal government’s guidance, we are actively pushing the process of relisting on a U.S. main board,” according to CNBC’s translation of his speech in Mandarin published by a Xiamen government-backed industry and commerce group.
U.S. Listing After Five Years
There were a few other details, including a timeline. In a response to the news network, Luckin Coffee later said it “remains committed to the U.S. capital markets, though we have no clear timeline for returning to the main board listing.”
Luckin’s was listed on Nasdaq between May 2019 and June 2020. During that time, revelations emerged that the coffee chain had fabricated over $310 million in revenue for 2019. Following this, the company agreed to pay a $180 million penalty to settle accounting fraud charges with the U.S. Securities and Exchange Commission.
In the aftermath of the fraud, Guo replaced the then-CEO, Charles Zhengyao Lu, and, in 2022, the company announced that it had completed restructuring its financial debt and emerged from Chapter 15 bankruptcy proceedings.
What Does It Mean For Starbucks?
The development is notable as Lukin opened its first cafe in the U.S. in July this year, entering the home turf of Starbucks. Meanwhile, Starbucks just sold a majority stake in its China business to a local investor.
As of now, Lunkin’s shares trade over-the-counter in the U.S. A relisting of its American depository receipts (ADRs), which trade on a major stock exchange, unlike the OTC shares, would have certain implications.
Investors and analysts could compare Starbucks’ performance and stock with Luckin’s, and retain the option to invest in another multinational coffee chain besides Starbucks. Meanwhile, Lunkin is expanding internationally. It opened cafes in Singapore, Malaysia, and Hong Kong over the last two years. A U.S. listing would lead to a bigger company presence in the country, ultimately helping it launch more stores.
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