The Law Offices of Frank R. Cruz Announces the Filing of an Expanded Securities Class Action on Behalf of Luckin Coffee Inc. ...
April 10 2020 - 12:00PM
Business Wire
Shareholders with $500,000 in losses or more are encouraged
to contact the firm
The Law Offices of Frank R. Cruz announces that a class action
lawsuit has been filed on behalf of persons and entities that
purchased or otherwise acquired Luckin Coffee Inc. (“Luckin” or the
“Company”) (NASDAQ: LK) securities: (1) between May 17, 2019 and
April 6, 2020, inclusive (the "Class Period"); (2) in or
traceable to the Company's public offering of ADSs conducted on or
around May 17, 2019 (the "IPO"); and/or (3) in or traceable to the
Company's 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. This class
action expands the class definition in earlier filed cases.
If you are a shareholder who suffered a loss, click here to
participate.
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.
Then, on April 6, 2020, Goldman Sachs & Co. LLC announced
that an entity controlled by Luckin’s co-founder had defaulted on a
$518 million margin loan facility and a group of lenders was
putting 76.3 million of the Company’s ADS—pledged as collateral for
the loan by Luckin’s co-founders—up for sale.
On this news, the Company’s share price fell $0.99, or over 18%,
to close at $4.39 per share on April 6, 2020. On April 7, 2020,
NASDAQ halted trading of Luckin’s securities for “news pending” at
a last sale price of $4.39. On April 9, 2020, NASDAQ changed the
trading halt status to “additional information requested” from the
Company.
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.
Follow us for updates on Twitter: twitter.com/FRC_LAW.
If you purchased Luckin securities during the Class Period, you
may move the Court no later than April 13, 2020 to ask the
Court to appoint you as lead plaintiff. To be a member of the Class
you need not take any action at this time; you may retain counsel
of your choice or take no action and remain an absent member of the
Class. 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 Frank R. Cruz, of The Law
Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los
Angeles, California 90067 at 310-914-5007, by email to
info@frankcruzlaw.com, or visit our website at
www.frankcruzlaw.com. If you inquire by email please include your
mailing address, telephone number, and number of shares
purchased.
This press release may be considered Attorney Advertising in
some jurisdictions under the applicable law and ethical rules.
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version on businesswire.com: https://www.businesswire.com/news/home/20200410005045/en/
The Law Offices of Frank R. Cruz, Los Angeles Frank R. Cruz,
310-914-5007 fcruz@frankcruzlaw.com www.frankcruzlaw.com
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