SAN FRANCISCO, April 11, 2020 (GLOBE NEWSWIRE) -- Hagens Berman urges investors in Luckin Coffee Inc. (NASDAQ: LK) who have suffered losses in excess of $1 million to submit their losses now. Only two days remain until the April 13, 2020 lead plaintiff deadline in a securities fraud class action suit against Luckin and other wrongdoers.
Luckin Coffee Inc. (LK) Securities Fraud Class Action:
The complaint alleges Defendants misrepresented and concealed that Luckin’s financial reports overstated its financial health and were therefore unreliable.
According to the complaint, investors began to learn the truth when Muddy Waters Research published a scathing report on Jan 31, 2020, citing “smoking gun evidence” showing that Luckin presented false financial metrics. According to the report, since Q3 2019 Luckin inflated per-store per-day sales, its net selling price per item, its advertising expenses, and its revenue contribution from “other” products. This news sent the price of Luckin ADSs sharply lower that day.
Then, on Apr. 2, 2020, before the market opened, Luckin disclosed that “beginning in the second quarter of 2019, Jian Liu, the COO 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.
Since this time, the situation at Luckin has only gotten worse. Specifically, on Apr. 7, 2020, trading in LK was halted indefinitely after a group of lenders led by Goldman Sachs had reportedly taken action to seize 76.4 million LK shares due to an entity controlled by Luckin’s chairman, Charles Zhengyao Lu’s, default on a secured loan.
“We’re focused on investors’ losses and proving Defendants intentionally manipulated Luckin’s financial metrics,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding Luckin should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email LK@hbsslaw.com.
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Reed Kathrein, 844-916-0895