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Luckin gets another de-listing notice from Nasdaq, shares slump 18%

·1 min read
FILE PHOTO: A cup of 'Luckin Coffee,' coffee is poured during the company's IPO at the Nasdaq Market site in New York

(Reuters) - Luckin Coffee Inc <LK.O> disclosed on Tuesday that it received a de-listing notice from the Nasdaq Inc <NDAQ.O> last week after it failed to file its annual report, sending the shares of the Chinese coffee chain down about 18%.

This is the second notice from the U.S. stock exchange. The previous one was issued in May, after the company announced a probe saying that a top executive fabricated and overestimated as much as 2.2 billion yuan ($311.5 million) in 2019 sales.

The latest reason cited by the Nasdaq is in addition to the two bases disclosed last month - public concerns raised by the fabricated transactions and the company's failure to disclose material information.

The Chinese company, which competes with U.S. coffeehouse Starbucks <SBUX.O>, said the failure to file its annual report was due to delays caused by the COVID-19 pandemic and as it awaits the result of the internal probe. (https://bit.ly/3fQOMsZ)

The company will hold an extraordinary general meeting next month to vote on whether to oust several directors, including chairman Charles Zhengyao Lu.

Luckin's shares have plunged more than 85% since April since the internal probe was announced and has resulted in the company defaulting on a loan secured by pledging millions of shares.

The shares were down at $2.6 in premarket trading after rising earlier in the day following a Reuters report that it picked investment bank Houlihan Lokey <HLI.N>, also appointed by troubled German tech firm Wirecard <WDIG.DE>, as an adviser.

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur)