Luckin Coffee Fraud Explained 

It lowers suspicion on anything higher and lowers the fall of distrust to the investors and consumers so if the company can handle a small fall it's better than losing it all

No doubt it was a very brave move and it pays off in the end.

power of communism

They survived the scandal and are now bigger than Starbucks in China.

@@ayyemtee It also isn't like C-level execs don't get a golden parachute in their contracts in case they get fired. The other dirty secret is that corporate executive hiring doesn't really care about work history. A CEO can run 5 companies into the ground, fired 3 times, and have 10 open sexual harassment lawsuits, but still be hired as a C-level at some other company in a totally different industry.

"Our business model is based on volume, not revenue, that's why we give it away!"

If you don’t understand it, then don’t buy it. Simple. If they ( Luck in coffee) can’t explain to everyday investors how their business model works, then don’t buy into it! Remember, they have explain in reports how it generates their income for its coffee sales. How do they have an edge over an international incumbent like Starbucks? Starbucks has been in the coffee game for way longer than this dubious upstart..

When will some Chinese "entrepreneurs" ever learn the truth from their own saying (translated from Chinese): "Paper will never wrap fire", and stop playing with it (fire)! Is the company still around?

@@jnewman1718 Yea, you can still get one in China. Their americanos actually tastes a little better than Starbucks.

Yep. Reminds me when you hear about the stock market, "this time things are different". :D

Its still a successful business, just not as much as they said. Went for a greedy shortcut. Freakin 2500+ stores in under 2 years

"I'm going to sell coffee."

spot on. the 30 second elevator pitch: critical

现在是6000+@@chibinya

It's a good test for how well the CEO understands what the company does.

No, you don’t understand. Our business model is different because we use Artificial Intelligence.

@@shanetonkin2850 exactly, add AI to all your business plans.

@@doords 🤣🤣正确的

we brew coffee using AI. Its suppose to taste 10 times better with 1/10 the cost. our stock price is thus undervalued

Actually, it can be pretty complex... all big coffee chains are about everything except coffee... nobody goes to big chains for coffee. They go for many reasons, mainly ethical-aesthetic reasons, and ideology. If anyone wants coffee for real, they go to a small place, where there's a serious barista, who knows what he/she is doing, and it's not a 21 y.o. child who made a 2 months course... And only in small coffee bars, one can get the good stuff. But in China, where coffee is only popular in very few places, selling it is not that easy at all. And this company seems to be doing pretty well... So, trust me, it's not about coffee. Not at all. Same with Starbucks... and consider this: 70% or more of what people actually order, is just milk and sugar (a freaking bad joke, not a coffee). And one of the worst coffees you can try is the one from Starbucks... awful quality, and mostly clueless "baristas"... and yet people are willing to pay 5-6 USD for a F... latter there... Whilst a perfect cappuccino (the way it should be prepared, the way only Italians seem to know) in a simple place, RIGHT IN FRONT OF THE COLOSSEUM, costs 1,5 euro or 2... Talking about investment...? imagine, how much must it cost to have a place in front of the Colosseum, in Rome? ... So, what coffee?

WTF ??🤔

Not agree, somehow it’s the same level. What do u expect for half or even cheaper the price?

@@johnsoncao3114 I've never had their coffee. But roasting is a huge part of what makes coffee good or bad. Starbucks burns their beans. It doesn't cost very much extra energy for them to burn their coffee. And a lot of their money goes to advertising

@@veganpotterthevegan Coffee making isn’t a 3nm chip, I do grab a coffee nearby when traveling. We have Gloria Jeans and Esquires and Tim’s and this long time Starbucks here. Scientifically or emotionally, aren’t so much difference. Luckin is definitely a coffee at the list.

Starbucks has notoriously over roasted coffee. The appeal is that at this point Starbucks could provide consistent over roasted coffee, be friendly to new drinkers of over mixed coffee with relatively better customer experience and options to venture outside of coffee. Luckin was attempting to do: over roasted coffee, appealing design of café, and aggressive expansions. One of these businesses began as local peddler and systemically understood its market, becoming more than coffee. The other was attempting to follow an MBA playbook of operating a business based on text book success of other businesses. So Luckin is a copy cat that isn't doing enough to innovate, other than its recent groundbreaking fraud. Anyways, starbucks is not great but has relatively better customer experience. Customers are not judged as they would be by better coffee places. Starbucks are happy to collect decent money on beverages that are not true to tradition. Starbucks makes coffee accessible. It doesn't educate its customers and charges a premium over other fast casual establishments.

Well, buisness model was to sell coffee like anyone else, and their sustainable competitive advantage was to use "AI" (modern data analytics) to reduce cost per unit, but I'm sure Starbucks is doing that as well anyway.

Very true

Can you explain Microsofts business?

@@bryce.ferenczi not really. Their coffee has to be ordered using app. They know each of their customer. Starbucks are way behind.

@@bryce.ferenczi l

They were created by the CCP, it was made to lie

@@marcusanthony9322 fools believe in lies.

@@kevinchen5703 Only fools believe in the CCP

@@Dfthg-bz3hp Well you believe they are bad. So you the fool?

@@Dfthg-bz3hp I don't think the Chinese need you to believe in them. You believe in Trump or Biden?

Mike are u a moron luckin actually sell huge volume in china lol

@@jasonjin5253 was vs is Luckin is doing great these days

@@jasonjin5253 Not even close to heytea.

@@gold9994 true ;D but luckin isn’t bad heytea much better

We have lots of seedstock companies with some pretty innovative ideas in BC's speculative stock exchange. BUT when your housing "innovation" is based down some gravel road in the interior of Peru or Columbia or Argentina when it's obvious market is an industrial country I get a little shaky.

lol

也许你应该目光长远一点今天你还会说这样的话吗目前瑞欣门店超过6000+

@@Mrchengpeng门店数量超过星巴克了已经 但是我感觉他家咖啡太甜 我不中意饮

@@harryhan2525 你可喝加浓美式，不加糖

@@harryhan2525中式星巴克，咖啡是不好喝的但是特飲挺好喝😂

I believe thats only possible in China, I don't think you can do that in the USA.

@@adkrgrc6786 You'd be wrong...alot of highly criminal CEOs simply quit with a large bonus payout before any fallout from their action hits them, and even if they get tried and found guilty, usually the company (since companies are people) gets the hit, not them. And even if it hits them directly (such as when the company sues them), it's usually a fine or a settlement, something they just pay off and be done with.

@@adkrgrc6786 Who did you think the Chinese learn from lmaooooo. All tried and true malicious practices comes from Wall Street.

The former CEO actually lost everything. He is not even allowed to travel by air or stay in a star hotel.

The CEO was actually fined to hell by the CCP regulatory board, and last we heard was essentially under house arrest, with most of his travel and hospitality privileges revoked.

Of course you commies enjoy that.

It really isn't 😆 people would care less about a coffee shop. More like the trolls who want people to believe in it.

@@Is2RoxasSora what you on

This 🤌🏽

Smart idea !

I don't want to be racist or sexist, but I've seen that everything Asian women make is mostly fraudulent, or has cooked books - Forever 21, Luckin Coffee, Coffee meets Bagel, etc. As a rule, I never investing anything Asian women build. This is just a correlation I see. Atleast Ali Baba went down because of their stupid government and not because their CEO was incompetent. I bet most of the Asian women are used to their government funding them in their home country :/

@@mohit4902 Woah there. Cool it with the anti-semitic remarks.

Geez - like Americans are any better. Enron, Theranos, Quest Communication, World Comm, Bernard Madoff. Wasn't even trying and I can name some of the biggest American wallstreet scam in the recent past, not even mentioning the housing bubble and the crash that followed: Bear Stern, Lehman Bros, Washington Mutual, CIT Group, Fannie Mae, Freddy Mac. LOL - even Chrysler and GM and GE crashed wiping out billions and killing millions of retirement dreams.

The Chinese certainly do. That’s why their real estate is so sky high.

喝全家吧 全家一杯拿铁到手才7块

@@harryhan2525 全家我只在江苏见过其他地方还没见过全家店我也喜欢全家的便当

Daamn lol 🤣

Ты русский?

I think it's something all investors have to go through. For me it was Cisco and JDS Uniphase. I got burned, and it motivated me to learn about investing.

$500!!! You should get a team of lawyers and sue them.

That's a great lesson to learn early & glad it didn't make you quit, you did the right thing and got better after a bad time

Bro, don’t text that bot

😂

@Disney Suck Rhino Dixs Judging by your profile name I’d say you’re not a fan of Disney

YES! We called their BS About 2 years ago, during one of my first business analysis research projects; our group uncovered red flags from business decisions they made. We found it a little suspicious that we rarely hear about or see Luckin Coffee product/services in our Southern California Asian community areas of the city moving to release an IPO. Not like they'd have a ghost of a chance against Starbucks, Dunkin, & McDonald's anyway. They'd still have to fight Ten Ren's, Lollicup, & Tastea for any moves on American soil.

Yes, and you have to wonder what is keeping Nikola afloat!

LKNCY relisting baby. it's gonna happen. less than a dollar from IPO price of $17.

It’s not. Deer isn’t a common animal in China

ah the deer, Americas favorite road kill

@@allansh828 It is. Shouxing, the deification of Canopus, is always portrayed as accompanied by a deer, symbol of longevity.

@@allansh828 china is not a fuckin island, of course it has deers, i even saw wild ones barging into the city once

@@AlexTenThousand Being Shouxing’s ride isn’t the same as Shouxing himself.

Why is the coffee bad?

@@highandmightyqueen79 kind of normal, same as starbucks i guess. but cheaper for sure.

@@highandmightyqueen79 it wasn't, Chinese people just like foreign brands lol

I love luckin

I think people still believe Starbucks is classier They are not there for the coffee itself, they are meeting people they don’t want to let down? Who would meet clients in a McDonald’s?

Me too :) figured it had to rebound after that drop

@@maryyu4010 when it initially dropped from $25 to $6 in a day, a hedge fund poured in billions. then when it dropped to $2, they lost so much that they had redemptions and had to close the fund haha. dangerous just buying the dip. i bought because i valued the company after taking out the 700mil in fake revenue, and found it was at a cheap valuation compared to starbucks, which obvioulsy has less room for growth by comparison. Did you do any analysis or just buy the dip?

@@habibbialikafe339 admittedly I just bought on the dip - not a lot, certainly just a drop in the bucket of my portfolio, but thought ,why not take a chance 😀

@@maryyu4010 good luck! you will need it playing the luck game haha

Good job habibi

Yes this is suspicious as Indian coffee chain the Cafe Coffee Day chain, consisting of over 1,600 outlets in 219 cities, was valued at $1.5 billion. It took the 12 years to achieve that no in 2019🤯

obviously sponsored by the government

@@CutHardstylez Just like Nio.

Conmen

@@Akelehimarenge cuppocinos and lattes is not popular in India.thry only drink chai tea and eat pratha naan and curry.

@Daddy1724 Copy Cut Paste

I wonder damn near every day why any country on this planet allows China, whether it Chinese enterprises or the CCP play ball in the global equites or bond markets. The world needs to step up and hold these idiots to account one day, with an economic wrecking ball.

Excellent idea and comment. Thank you.

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@@mariasofia3994 who are you? Owner of this yt ?

Lol uh moron u do know that luckin is still operational and they have huge sells in China to this day

@@jasonjin5253 Are you a Luckin paid troll? You are all over this comments section.

@@nikhilsrl And it looks like China knew exactly what they were doing.

I find it hard to believe that they operated with impunity in China without the government knowing. Going overseas, in my opinion, could have been part of a plan to sucker investors with underlying motives by the Chinese government. One thing we know is that China is busy worldwide looking for vulnerabilities.

Yes, how they silenced the CEO and dor weeks nobody know what happened to him...

And now DIDI smh

Evergrande $300,000,000,000 USD billion in debt?

Cool

Doesn't seem that surprising in all honesty. The only thing they needed was to grab customers, which the mad rush of people cashing out their coupons (and them managing to fulfill those presumably) would have helped reinforce a habit for potential future stability if the store would still manage to stand - and there were other potential reasons for customers wanting to swarm in aside from just the coupons. Not to mention all of the things with Covid and ordering online to grab the drinks and leave is now a more standard model for ordering drinks. The fraud scandal being exposed just helped reset the valuation to what was appropriate, and them managing to survive the bankruptcy was the only thing that was actually needed after managing to get people to develop a habit (difficult, but probably not the worst when you have so much built up already as a base) Even the whole cashing out of coupons probably wasn't necessarily a net negative -- people do tend to make other purchases while they are at it, such as for friends/co-workers while they are there. And there is no mention of what those coupon conditions were, so there could have been some other blurb such as "need to buy another item in order to redeem the free drink" so they'd actually make a profit of some sort (or at least hit neutral rather than be stuck in a net negative). Someone can probably prove otherwise on what coupon terms and conditions were though, since I don't know anything on what was actually on there. But many places do have terms like that in regards to coupons, such as Starbucks having a coupon that was given out in the morning for free coffee that could only be redeemed in the afternoon when there are people who cannot have coffee that late in the day

Yup, also it's PCAOB... The accountant part me is screaming that.

What is otcpk

I'd buy coffee that came in a cup with that on it.

If you look at again with imagination, you'll see middle fingers all over.

Also, the background behind the deer is a tiger biting the neck of the deer.

@@broccolifan6971 I guess you are imagining too much. Seriously, for the logo design perspective, this Luckin Coffee's logo is much better than the complicated Starbucks' logo.

yeah, because a Deer with antlers....really says coffee so clearly. Are U Nuts? The idiots here must think coffee comes from Deer.

How many shares did you buy?good timing 🔥🔥🔥

Missed a bullet there!

@@Beeman2892 It was so long ago, It was most likely low 4 digits

Sometimes i wonder how people get rich at these days.

But people don't believe it's true anyone can make money from home online because of the high rates of scams in the business.

Yes that's true

Knowledge is the greatest commodity investment is the quickest path to financial freedom, the rich stays rich by spending like the poor yet investing! While the poor stays poor by spending like the rich yet not investing.

Nice one

I don't think the coffee was better than Starbucks. But it was certainly much cheaper, if you used their promotions, which everyone did. Luckin was super popular in Beijing because of their aggressive marketing, constant promotions and free delivery. The Chinese millennials were hooked. Me, too.

Being better than Starbucks isn't exactly a high bar. Although to be fair, the roastery in Seattle does pretty decent small batch roasts. It's their mass produced stuff that is pretty rubbish

its pretty easy when you are gambling with company money, no brainer,

Does matter whether the businesses succeed or fail. The middle men bankers have mitigated all the risk by financing with other people's money, but still sharing in the profits by just taking their share from the spread in the interest.

@@bgates275 But that's no risk mitigation. That is pure gambling. Most of the PE Firms to me are gamblers. Most especially Soft Bank. I don't just understand how these Institutional Investors are stupidly pumping money into these walking corpses of a Fund Manager. They never learn from past experience. Sane thing happened to Abraj Capital just few years ago and they can't change their ways

Nevertheless, we've allowed the centralization of MONEY: you go to New York or London on their terms or you go home. In 5 days when the USA credit crunch hit ALL our concrete high-rise project stopped for eight months while we looked for other financing, AND even the Olympic venues for the 2010 Winter Olympics in Vancouver slowed down, and almost didn't get done in time. I built the waterfront housing unit, and the Squamish Hospital reno. just in time for the Games.

Ikr crazy

Chinese companies hid their books under the guise of national security and the nasdaq allowed it. The recent overhaul was meant to address this very issue and chinese IPO's will have to allow access to their banks in the same way US firms do.

Not.

The fact these company decides to chose NASDAQ is because they are the most relaxed on auditing.

The Exchange earns millions along with the brokerage firm and/for the favorite customer. They overlook things. It's their interest to make money thru IPO. There is a conflict of interest.

I'd rather require investors know WTF they're investing in, but that'll never happen.

Yes, quick mobile chain stores for easy grab.

I can confirm that, many people I know were cheering their fraudulent behaviour on which stems from a very recent "them vs us" tribalism bullshit, it has been getting worse since the virus and Trump calling it "The Chinese Virus" definitely assisted the rise of more tribalism. This just left me miffed. So they did an internal audit, came out and was like "yeah guys, we fucked up, CEO and COO are now fired, the 88% (number of fortune!!) was more or less correct, shit", that's... surprising. I'd expect these big companies to put up the illusion and since it's a Chinese one, they'd play on tribalism to weaponise their nationalistic pride (cough Huawei). A nice breath of honesty. The morale here is simple, be worried when Shitron supports you!

The recent new wave of expensive money losing companies is hardly new by now, with the tons of famous examples from Uber to Wework, you can trace the crazy to when softbank started the vision fund.

@@euclideanspace2573 it's all relative. They've seen so many fraudulent companies ripping off people's savings. At least Luckin has been faithful to consumers.

@@allansh828 Yeah, I'll give them points for being honest and taking immediate action, that's how audits should be performed internally. It's a rare sight to see in any questionable company, let alone Chinese ones. One comes to mind... Theranos.

well "fake it until you make it" is about attitude, not cooking the books.

Gotta learn from the best

The company will definitely go public again eventually.

The biggest joke is the company is profitable now and the value already recovered 😂. Shareholders made massive profits from delisting

@@stc2828 yes you are true

I came here to say the exact same thing. Can you imagine someone being crazy or stupid enough to invest in any Chinese company right now? You might as well just burn your money to keep warm this winter. It would be more useful.

Moral of the story: 40 years after the US oligarchs have allowed the US to be raped by China, they've now finally realized they were being ripped off. But Joe Biden, the Manchurian candidate is in office. So expect nothing concrete to happen save news coverage of the rape.

I suspect almost of those 2,000 stores were rented property rather than owned. When the rent is not paid, someone else will move it.

They are already restructuring and want to relist. So there is a good chance they will be allowed again

Stock moved from 2$ to 16$ for a reason

Luckin has a lot more than 2000 stores. Its a HUGE brand here in China and probably the biggest seller of all the coffee stores in China currently.

a thriving business

That will be Andrew Right.

这些人根本不知道这家企业现在在中国有多火。

I got out ..I will never invest in Chinese companies.

Look up when the CCP gets involved with investing in the US.

It is 8 a share now

To be fair, the Hong Kong ban aged incredibly poorly; like a good ol' fine glass of milk.

Andrew Left should be in jail. He's nothing but a crook.

I was living in Beijing in 2019 and I was wondering how Luckin Coffee was so prevalent. Their coffee was good, but it cost half of what you would pay at Starbucks, and there weren't all that many customers considering how fancy the stores were. I couldn't see how they could stay in business. Most shops in China are very crowded, so they really do make it up on volume, but not these coffee shops.

I'm surprised they sell coffee. Wouldn't tea makes more sense?

@@simpletongeek You may be thinking of Hong Kong. Mainland China is not at all oriented towards British tastes, the consumers there are very into Western brand names, whether from the US or Europe, so you see a lot of US food chains and European luxury goods, including cars. It seemed to me that half of the cars in Beijing are VWs ("affordable cars") and the other half are Jaguar, Porsche, Audi, Mercedes, BMW, Masarati, etc. Quite a few Jeeps as well. You have to go to the smaller cities to see many Chinese brands.

Why only China, even India and many so called developing countries..Rogues creat rogue entities to launder the dirty money of their political bosses...

The biggest fraud is they got to delist at rock bottom price 😂

You know it’s a 20 oz cup right? Don’t get me wrong I have been boycotting Starbucks for 7 years now.