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A Reddit trader claims they lost their entire life savings when Luckin Coffee's stock tanked

luckin coffee
  • One Reddit user claims to have lost their life savings after Luckin Coffee's plummeting shares erased 224,000 euros ($252,000) from their portfolio.
  • The WallStreetBets forum member posted a screenshot of their 95% loss on Wednesday, adding "now I'm broke af."
  • Luckin Shares nosedived 80% on April 2 after announcing employees including its chief operating officer falsified 2.2 billion yuan ($310 million) in sales throughout 2019.
  • Shares fell further through May after a monthslong trading halt was lifted and the Nasdaq exchange issued a delisting warning.
  • "I didn't know they could cheat on balance sheet ... and that a company can just fail in 3 months," the Reddit trader wrote.
  • Visit the Business Insider homepage for more stories.

The lawless members of Reddit forum WallStreetBets are at it again, celebrating a member's 224,000-euro ($252,000) loss on Luckin Coffee shares.
A Reddit user of a somewhat vulgar name shared a screenshot on Wednesday revealing their 95% loss on the Chinese coffee chain's stock. The 28-year-old European fitness coach was intrigued by Luckin's 300% gain from November to January. After piling more than 235,000 euros ($264,000) into the company's shares, disaster struck.
Reddit WSB Luckin Coffee
Few high-profile stocks could've driven as much interest and subsequently minted such incredible losses. Luckin shares nosedived 80% on April 2 after an internal investigation found the company's chief operating officer fabricated sales totaling 2.2 billion yuan ($310 million) throughout 2019. The coffee chain warned investors that past guidance and earnings releases were no longer reliable.
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The situation worsened days later when trading of Luckin stock was halted on the Nasdaq exchange. The stock sat at $4.39 for more than a month. The company received a delisting notice from Nasdaq on May 19, and when trading resumed the following day, shares cratered as much as 45%.
The company aims to request a hearing with an exchange panel, according to a May 19 filing, and will remain listed pending the hearing's outcome. Nasdaq staff cited "public interest concerns" for its delisting notice, adding the falsified sales and past failure to disclose critical information creates dangerous risks for investors.
"I didn't know they could cheat on balance sheet ... and that a company can just fail in 3 months," the Reddit trader wrote, adding the losses amounted to "all my life savings" and "now I'm broke af."
Still, the Reddit trader remains optimistic. They mentioned in a comment that, between their two businesses, losses should be recovered in a few years. The user also admitted that, after learning their lesson "the hard way," they plan to solely invest in ETFs, gold, and bonds for the foreseeable future.
"I do really believe everything in life happens for a reason," he wrote. "Is a painful lesson but I learned it the hard way and it will help me through my whole life."
Luckin Coffee closed at $2.58 per share on Wednesday, down 93% year-to-date.
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* This article was originally published here
http://feedproxy.google.com/~r/clusterstock/~3/syeuSi2MzjU/reddit-wallstreetbets-trader-lost-life-savings-luckin-coffee-stock-decline-2020-6-1029281054


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