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New Details Emerge About Luckin Coffee Short Seller's Takedown

The Wall Street Journal reported.” data-reactid=”19″>New details have emerged about an anonymous short seller report on Chinese coffee chain Luckin Coffee Inc, including the potential author and the methods used, The Wall Street Journal reported.

The e-mail suggested Luckin Coffee is engaging in fraud and cited firsthand checks of more than 1,500 individuals at 15% of Luckin’s more than 4,000 stores in China, WSJ reported. 

The anonymous short report concluded that Luckin inflated its sales figures after analyzing and compiling firsthand accounts, customer receipts and more than 11,000 hours of video.

Luckin executives acknowledged the fraud and said it relied on a few company insiders and workers.

scheduled to be delisted from the Nasdaq exchange as of Monday morning.” data-reactid=”24″>The stock was scheduled to be delisted from the Nasdaq exchange as of Monday morning.

The firm boasts around $2.5 billion in assets under management, most of which was made shorting Luckin’s stock, the source said.

It isn’t known why Ma and his firm won’t take credit for the anonymous short report, the Journal said. 

Block and his firm Muddy Waters shorted the stock based solely on the report.

“We just felt confident that the report was directionally correct, so we decided we’d be a good platform for it,” he told WSJ.

Andrew Left of Citron Research, another well-known short-seller, was a buyer of Luckin’s stock after chatting with large Luckin shareholders, according to WSJ. The shareholder assured Left that Luckin’s internal channel checks dispelled allegations of fraud.

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