Luckin Coffee business model

[highernote]

Luckin Coffee's stock price dropped 81% overnight last week after it was found that employees fraudulently overstated profits.

Maybe it's just me, but it seems like Luckin Coffee's business model is based on fraud and deception. What do you think?

https://www.fastcompany.com/90457552...companies-2020

When Luckin enters a new market (it’s currently in 53 Chinese cities), it opens 5 to 10 “relax” stores—casual, sit-down coffee shops—and centralized kitchens from which it serves delivery orders. It entices people to download the Luckin app—users can only pay digitally—with a free cup of coffee. The company then decides where to open pickup kiosks based on customers’ location data. Once Luckin has blanketed a market, it shuts down delivery—because the economics don’t make sense for a product that sells for about $2.50—and relies solely on pickup.

So Luckin opens 5 to 10 stores in a new market. Then they entice customers to download their app and they get a free cup of coffee. After that, customers can only pay digitally. Then they offer free delivery. However, once they have blanketed a market they shut down delivery.

On the one hand it is a brilliant strategy. Think of all the data they are gathering. But it's also a deceptive strategy because they don't warn customers that they are using their data to figure out where to put new stores and once they get enough data they close down the delivery part of the business.

Maybe it's legal, but it seems premeditated and sleazy to me.

I would never be a customer. Call me old fashioned, but I like paying in cash sometimes.

[FakeNameChanged]

Originally Posted by highernote

Luckin Coffee's stock price dropped 81% overnight last week after it was found that employees fraudulently overstated profits.

Maybe it's just me, but it seems like Luckin Coffee's business model is based on fraud and deception. What do you think?



So Luckin opens 5 to 10 stores in a new market. Then they entice customers to download their app and they get a free cup of coffee. After that, customers can only pay digitally. Then they offer free delivery. However, once they have blanketed a market they shut down delivery.

On the one hand it is a brilliant strategy. Think of all the data they are gathering. But it's also a deceptive strategy because they don't warn customers that they are using their data to figure out where to put new stores and once they get enough data they close down the delivery part of the business.

Maybe it's legal, but it seems premeditated and sleazy to me.

I would never be a customer. Call me old fashioned, but I like paying in cash sometimes.

Al Gore Jr. is a director at Luckin Coffee. It looks like all the insiders bailed out. Stock price was giving clues back mid January, but I don't follow this company.

[highernote]

Originally Posted by FakeNameChanged

Al Gore Jr. is a director at Luckin Coffee. It looks like all the insiders bailed out. Stock price was giving clues back mid January, but I don't follow this company.

That's interesting. None of the directors of Luckin are listed on Yahoo Finance and no insider trades are listed, either.

I searched for Al Gore as a director of Luckin, but couldn't find any articles.

Do you know where I can find more info about Gore and Luckin?

[Saratoga_Mike]

Originally Posted by highernote

Luckin Coffee's stock price dropped 81% overnight last week after it was found that employees fraudulently overstated profits.

Maybe it's just me, but it seems like Luckin Coffee's business model is based on fraud and deception. What do you think?


s.

They're telling you this. Are you doubting it? Muddy Waters told the world a few months ago. The 852nd example of why to avoid these Chinese companies.

[FakeNameChanged]

Originally Posted by highernote

That's interesting. None of the directors of Luckin are listed on Yahoo Finance and no insider trades are listed, either.

I searched for Al Gore as a director of Luckin, but couldn't find any articles.

Do you know where I can find more info about Gore and Luckin?

Go to finviz.com and put LK in the symbol lookup, scroll down, you may have to click on the insiders tab after LK chart comes up.

[jay68802]

The thing that really stinks is the part, "Employees". Something this widespread usually is directed from the top.

[highernote]

Originally Posted by Saratoga_Mike

They're telling you this. Are you doubting it? Muddy Waters told the world a few months ago. The 852nd example of why to avoid these Chinese companies.

I have never invested in a chinese company and never will for this reason and many others. I have never felt I could trust their accounting rules. Hell, sometimes you can't even trust American companies. Remember Enron and Worldcom.

I bought shares in a russian communications company once. Not long after I bought it, russia forced them to eliminate foreign ownership through a forced buyout at a steep discount. I lost a lot on that stock. Never again.

There are U.S. investors who have made fortunes in China over the past 20 to 30 years, but it probably helps to have boots on the ground to see what is going on.

[FakeNameChanged]

Originally Posted by highernote

That's interesting. None of the directors of Luckin are listed on Yahoo Finance and no insider trades are listed, either.

I searched for Al Gore as a director of Luckin, but couldn't find any articles.

Do you know where I can find more info about Gore and Luckin?

This is strange, but all references to Al Gore has been wiped from the database that I use. And no data for any Luckin insiders at all. But in looking I've found that Al Gore Jr. is a large insider in Apple, having owned as much as 515,274 shares back in 2017. His pay there $360K per year. And he just exercised an option and picked up an addl. 32,889 shrs at the ridiculous price of 28 bucks. I had no idea Al Gore had this kind of money. I no longer have a paid subscription to some of the better insider reports and filings. So it's believable to me that AGjr had been an insider at Luckin, and probably several others. His climate change stature and Nobel prize makes him a desirable target for new and older companies.

https://wallmine.com/people/2035/albert-jr-gore

I see he also dumped 35 mil into Capricorn INvestment Group a few years back. is or was a major holder of Google, and also Silver Springs Network.

http://capricornllc.com/

Is a founder of this investment group in London too.

http://www.generationim.com/

[xtb]

Originally Posted by FakeNameChanged

... is or was a major holder of Google...

Makes sense, he did invent the internet.

[Saratoga_Mike]

There are a couple of short reports out on GSX, another Chinese-based ADR (online education).

[Saratoga_Mike]

Originally Posted by Saratoga_Mike

There are a couple of short reports out on GSX, another Chinese-based ADR (online education).

Carson Block (Muddy Waters), the king of Chinese short sellers, now calling GSX a "near-total fraud." Muddy Waters had the short call on Luckin Coffee (and many others over time).

https://www.muddywatersresearch.com/...-is-short-gsx/