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Luckin Coffee Inc. (LK)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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1.3800+1.3800 (+-54.00%)
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Neutralpattern detected
Previous Close0.0000
Open2.1000
Bid0.0000 x 312500
Ask0.0000 x 40700
Day's Range1.1900 - 2.4600
52 Week Range1.1600 - 51.3800
Volume163,366,447
Avg. Volume35,865,822
Market Cap349.343M
Beta (5Y Monthly)N/A
PE Ratio (TTM)N/A
EPS (TTM)N/A
Earnings DateNov 13, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est46.60
  • It’s a Mouthful but WiMi Hologram Cloud Stock Has Actual Merit
    InvestorPlace

    It’s a Mouthful but WiMi Hologram Cloud Stock Has Actual Merit

    When I discovered that I'd been assigned to cover Wimi Hologram Cloud (NASDAQ:WIMI), I thought it had to be some prank by one of my editors. Let's let the technophobe cover Wimi Hologram Cloud stock. That ought to be good for a laugh or two.Source: Shutterstock Seriously, I had never heard about this Chinese company that specializes in holographic products and services utilizing augmented reality (AR). A quick flip through its 20-F annual report and its initial public offering prospectus from late March, and I think I've got the lay of the land.Whoever came up with the name ought to be fired because it's a mouthful. Beyond that, the applications for its advertising and entertainment customers seem authentic and its sales, growable.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat said, I think it's easy to see by the volatility in July, that not everyone is convinced WIMI is the real deal. Like Luckin Coffee (OTCMKTS:LKNCY), WIMI could end up imploding on itself. * 7 Travel Stocks to Buy Banking On Pent-Up Demand Until then, here's why my first impressions are to recommend its stock for speculative investors. For the rest of you, I'll need a little more time to consider its business viability over the long haul. Why I Like WiMi Hologram Cloud StockInvesting in Chinese stocks takes guts. It's hard enough making money off U.S. companies. But betting on businesses operating halfway around the world, where it's virtually impossible to verify any of what's written in its Securities and Exchange Commission (SEC) filings, makes a bet on the holographic AR company a shot in the dark.The company's IPO prospectus lists a total of six underwriters. Some of them, such as Benchmark Company and Maxim Group, I'm familiar with. So, it's not as if a bucket shop took the company public.According to Frost & Sullivan, a 60-year-old consultancy and research firm that specializes in growth companies, it believes that WiMi is "the largest holographic AR platform in China, in terms of total revenues in 2018."It's always good to be the biggest or the best. However, as I said earlier, I have no real way of determining if this is true, other than finding a second opinion from someone other than Frost & Sullivan.But for now, let's assume this is 100% accurate.WiMi was able to sell 4.75 million American Depositary Shares (ADS) at $5.50 per ADS in its March 31 IPO. It then filed on July 27 to sell an additional 7.56 million ADS' at $8.18 a share. One of the buyers of its stock is said to be an affiliate of Weibo (NASDAQ:WB), the owner of WeChat, China's largest social media platform.Less than two weeks earlier, WiMi stock was trading above $24. And then the hype over its business became too much for investors, and its stock crashed back to earth, losing about two-thirds of its value by the time it filed for a follow-on offering. Timing Is EverythingFor me, two things stand out about the company.First, companies like Weibo wouldn't be buying the follow-on offering if they felt WiMi's business was a hollow shell. Secondly, the company is already profitable, meaning any growth in the future should come with correspondingly higher profits.As I write this, WiMi has a market cap of $561 million. That's 12 times its 2019 sales of $45.8 million and 38 times its 2019 earnings of $14.9 million. That seems like a nosebleed valuation. However, in just two years, it has grown its sales and earnings by 66% and 42%, respectively.That's not bad when you consider that the holographic AR market remains underpenetrated in both China and the world.Some of my InvestorPlace colleagues have advised readers to exercise caution when considering an investment in the company."WiMi Hologram Cloud is a young advertising company. It's currently riding the wave of investor optimism on hologram technology," wrote Tezcan Gecgil on March 30."I believe it'd be prudent to see at least the next quarterly earnings before committing fresh capital into the shares. Management has not yet given an update on the date of release for the earnings."The downside, Gecgil maintains, is that a second wave of the novel coronavirus could put a severe crimp in the company's advertising revenue. News on this front or a bad quarterly report would undoubtedly send its stock lower, perhaps below its original IPO price of $5.50.While it's never a bad thing to go slowly, the fact that it's profitable ought to reassure speculative punters that the next quarterly report will be reasonably decent despite Covid-19.If you can afford to lose your entire bet, I like how the company's positioned itself. As we've seen with Luckin, there are much worse bets to make in China.Will Ashworth has written about investments full-time since 2008. Publications where he's appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post It's a Mouthful but WiMi Hologram Cloud Stock Has Actual Merit appeared first on InvestorPlace.

  • Trump Interrupts the China Day-Trading Party
    Bloomberg

    Trump Interrupts the China Day-Trading Party

    (Bloomberg Opinion) -- The U.S. threat to delist Chinese companies just got a lot more real. Yet businesses from Asia’s biggest economy continue to line up to sell shares on American exchanges — and are thriving. What’s going on?The President’s Working Group on Financial Markets has told U.S. exchanges to set rules that would require companies to grant American regulators access to their audit work papers, something that China has refused to allow. Firms already listed will have until Jan. 1, 2022, to comply, with removal from U.S. exchanges the ultimate penalty. Those seeking to sell shares will need to adhere to the new rules, according to the high-powered group of U.S. regulators, which includes Treasury Secretary Steven Mnuchin.You might think this ratcheting up of pressure, which reflects increasing geopolitical tensions and the fallout from accounting scandals at Chinese companies such as Luckin Coffee Inc., would put a damper on the rush of enterprises looking to go public. Anything but. Almost every day, it seems, another Chinese company announces plans to list in the U.S. — and they’re finding no shortage of takers. Late last month, Beijing-based electric-car maker Li Auto Inc. raised $1.1 billion selling shares in an initial public offering that priced above the marketed range. It was the biggest IPO by a Chinese company in New York since Shanghai-based rival NIO Inc. sold $1.15 billion of stock in September 2018. Xpeng Motors, based in Guangzhou, is poised to follow this month.Shares of U.S.-listed Chinese companies are also outperforming the broader market. The Nasdaq Golden Dragon China Index has surged 30% this year, compared with a 3.7% gain for the S&P 500.The phenomenon may be partly the product of a craze in day-trading fueled by pandemic lockdowns, which have left many Americans stuck at home looking for amusement. If the Robinhood crowd can drive shares of bankrupt companies to illogical heights, then why not Chinese stocks, too?On a more rational level, some investors may be betting that threats to delist Chinese companies are largely noise, and a compromise will eventually be worked out. Chinese listings are a gravy train for the New York Stock Exchange and Nasdaq, and both sides have a financial interest in ensuring that it doesn't get derailed.On this point, it’s worth noting that the U.S. regulators left some wiggle room. Chinese companies can hire a “co-auditor,” effectively having a second inspection performed by a U.S. accounting firm after a Chinese affiliate does the first. That would be a potential workaround for Beijing’s rules that prevent the Public Company Accounting Oversight Board from reviewing audits of U.S.-listed Chinese companies.To count on peace breaking out may be rash, though. There’s plenty of evidence that the move toward a U.S.-China decoupling is serious and tangible. Just look at the lengthening list of U.S.-traded Chinese companies that are selling shares in Hong Kong, giving them a secondary outlet into international capital markets in the event that they are forced to leave: Alibaba Group Holding Ltd., JD.com Inc. and NetEase Inc. among them.Or witness Tencent Holdings Ltd., which lost $30 billion of market value in Hong Kong on Friday after the Trump administration moved to ban U.S. residents from doing business via its WeChat app. It will be a brave investor who bets on this trend reversing itself.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Corporate Scandals Fuel Hiring Boom For Asia Investigators
    Bloomberg

    Corporate Scandals Fuel Hiring Boom For Asia Investigators

    (Bloomberg) -- A spate of corporate scandals in Asia from China’s Luckin Coffee Inc. to Singapore’s commodity trading firm Hin Leong Trading Pte are prompting some consulting firms to beef up their headcount for investigators.Across the world, investors are bracing for more corporate malfeasance. Carson Block and and other fraud hunters say the next big wave of scandals may be imminent as the coronavirus crisis makes bad behavior tougher to conceal.In times of economic downturn, more instances of fraud tend to come to light and individuals are also under greater pressure to perpetuate the wrongdoing, according to Chris Fordham, managing director at Alvarez & Marsal’s disputes and investigations team in Hong Kong and China.“We are hoping to increase our disputes and investigations team headcount from around 35 to 75 in the next two to three years,” said Keith Williamson, who leads that team at Alvarez & Marsal, adding that more than half of the increase will likely be in mainland China.Governance and murky accounting among Chinese firms are growing areas of concern for international investors as the nation opens up its capital markets.Since joining Kirkland & Ellis three years ago, this year has been the busiest for Cori Lable, a Hong Kong-based partner in the government and internal investigations group at the firm.The company has hired two people in Shanghai for investigations in the last few months and is recruiting in Hong Kong as well, according to Lable.“We are looking to hire people with language skills in the region,” said Lable, whose firm is advising a special committee formed by Luckin Coffee’s board to oversee an internal investigation.Kirkland & Ellis often works with clients evaluating potential investments in distressed assets, and its more active markets include China and India, where corporate pain has sparked investigations and internal reviews, according to Lable.“I think it’s natural when economic times are harder and balance sheets might be scrutinized more closely that irregularities come to the surface more easily,” said Lable.(Adds link to story about a Singapore fraud case)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.