ComprehensiveBusinessEnglish (20).pdf

《ComprehensiveBusinessEnglish (20).pdf》由会员分享，可在线阅读，更多相关《ComprehensiveBusinessEnglish (20).pdf（2页珍藏版）》请在得力文库 - 分享文档赚钱的网站上搜索。

1、https:/ （Adapted）Whats behind Luckin Coffees massive stock plunge?By Wang Tianyu and Cui Yingjie Starbucks Chinese competitor Luckin Coffee went through its darkest day as its shares dropped as much as 81 percent on Thursday after an internal investigation unveiled fabricated transactions.The coffee

2、 chain formed a special committee to oversee an internal investigation into certain issues during an audit of the consolidated financial statements for the fiscal year ended December 31,2019.Luckin disclosed that the aggregate sales amount associated with the fabricated transactions from the second

3、quarter of 2019 to the fourth quarter of 2019 amount to around 2.2 billion yuan(10.02 million U.S.dollars).As a result,investors should no longer rely upon the companys previous financial statements and earning releases.the company told investors.The huge scandal has caught officials eyes.The China

4、Securities Regulatory Commission on Friday denounced Luckin for financial misconduct,saying listed companies should strictly obey related market law and rules,and fulfill the information disclosure obligations truthfully and completely,no matter where they are.On the last day of January,short-seller

5、 Muddy Waters Research shorted the stock,citing an anonymous report revealing that Luckin played tricks in financial and operating numbers from the third quarter of 2019.The 89-page report claimed to find credible evidence to prove the number of items per store was inflated by at least 69 percent in

6、 Q3 and 88 percent in Q4 2019.The stock dropped more than 10 percent after the report came out.But three days later,Luckin said the methodology was flawed and the allegations were unsupported speculation and malicious interpretation of events.The stock price went back to where it was at before the r

7、eport.However,Luckin did not give substantiated financial data and evidence to support its rebuttal at the time.The fast-growing chain has been a superstar for investors.After starting a trial operation on the first day of 2018,Luckin spent just 17 months before being listed on the Nasdaq Stock Mark

8、et,becoming the fastest Chinese company to issue an initial public offering in the U.S.Why its up,Why its down So what makes this coffee brand so different?Targeted at the young generation of white collar workers,Luckin aims to challenge Starbucks dominance in China.Most of the domestic coffee compa

9、ny locations are pick-up stores that offer limited seating and are in office buildings and other areas where the demand is high.Within just several months from its founding in October 2017,Luckin quickly grew to thousands of stores across the country.According to Luckin Coffees official website,it o

10、perated 4,507 stores by the end of 2019 in China and vows to open 10,000 stores by the end of 2021.However,the unit performance is far weaker than expected and the fast expansion has burdened Luckins financial pressure.The average Starbucks store does about 1 million dollars in annual sales.At the s

11、tart of 2019,Luckins coffee houses were averaging about 150,000 dollars in revenue per store,said Luke Lango,a market analyst at InvestorPlace.To gain more market share,the coffee provider launched hand-brewed tea drinks to attract tea enthusiasts in the middle of last year,and added smart vending m

12、achines called Luckin Pop earlier this year to sell coffee more conveniently.Luckin started with coffee,but not just coffee.From coffee to tea,from stores to vending machines,Luckin has been constantly breaking boundaries.However,judging from the actual situation,Luckins various businesses are not a

13、s financially healthy as portrayed.The business is maintaining consumers by offering dramatic discounts and vouchers,not by the taste of its offerings.It always uses a cheap price to keep customers loyal.Many Chinese netizens have complained online,saying the lower price is the only reason that they

14、 choose Luckin rather than Starbucks.Some even said that Luckin is burning cash to occupy the market.In fact,though it was worth more than 8 billion U.S.dollars in 2019,Chinas coffee industry is still far from being saturated,said Daxue Consulting.The second-largest economy has the largest population on earth but one of the worlds lowest coffee consumption rates.