Luckin Coffee stock sinks 35% after trading resumes and one analyst says investors will be ‘wiped out’

Luckin Coffee stock sinks 35% after trading resumes and one analyst says investors will be ‘wiped out’

“Leaving aside the fraud, the figures that are available suggest that Luckin Coffee never had a viable business model,” Zolidis said, forecasting that the store closures will come as a result of losing access to capital. “The company grew too fast and acquired customers via promotional offers, without ever proving the economics.” In an April note, Zolidis said Luckin’s stores were “generating significant losses” and “do not appear to produce positive same-store sales.” He raised questions about whether the company could ever produce a profit. Quo Vadis rates Luckin stock sell.

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