Luckin Names New CEO After Ousting Lu

The Luckin Coffee (OTC: LKNC.Y) saga continues as the company brings in a new chairman and CEO in place of chairman Charles Lu and former CEO Jenny Zhiya Qian.

Replacing the top spot

The action started in April when a story broke that Luckin, which was founded and run by Lu, had fabricated $300 million in sales for its 3,680 stores in 2019. Luckin was delisted from NASDAQ as the drama unfolded, and Lu was investigated for fraud. The company was reinstated on the NASDAQ and then again delisted again, and Luckin's board tried to oust Lu as chairman. An internal investigation found that Lu was either directly responsible for or at least knew about the fraudulent activity.

Worker in a coffee shop giving a customer a drink.

Image source: Getty Images.

Last week, Lu was forced out along with four other executives, and on Monday the company announced in a filing that Jinyi Guo, who has been acting CEO, will take the permanent spot and also become chairman. Guo had previously been in charge of product and supply chain.

After Lu's forced resignation, two new members were appointed to the board.

A wild ride

Luckin debuted on the NASDAQ last year in May at $17 per share and rose to $50 in January of this year, before the pandemic and then the scandal. Luckin competes with Starbucks, which currently operates 4,123 coffee shops in China.

In the meantime, Luckin's shares are trading over the counter and have lost 93% of their value year to date. 

10 stocks we like better than Luckin Coffee Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Luckin Coffee Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 2, 2020


Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Luckin Coffee Inc. and Starbucks. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.