The Olympics may have been delayed, but we saw a gold medal dive from Luckin Coffee’s shares. Its fraud is a cautionary tale—but about what?
Lawyer of these Luckin investors said it is the first time investors have tried to hold a company accountable in China for fraud perpetrated on US markets.
Information asymmetries between tech-focused Chinese companies and US investors makes it easy for dishonest managers to lie to investors.
Luckin’s impending implosion has led to a lot of soul-searching with many questioning the environment that allowed Luckin to thrive.
After Luckin Coffee’s spectacular admission of fraud, more Chinese companies are finding themselves in the crosshairs of regulators and short sellers.