by Wolf Richter
Trading of Luckin shares now halted. Wall Street banks, which get big-fat fees, are all too happy to sell this stuff to the American public.
Luckin Coffee is a Chinese coffee chain, founded in 2017, that had sold American Depositary Shares (ADS) to the US public in an IPO in May 2019, thereby extracting $561 million from US investors. Each of those ADS represents eight actual shares. At the peak, on January 17, the market capitalization of the Luckin American Depositary Receipt (ADR) exceeded $12.6 billion. Then it went downhill, and last week, the price collapsed entirely, and this week, on Monday, shares fell another 18%, having now collapsed 91% from the peak in January. And this morning, trading was halted, pending news (I will update this when the news emerges):