Luckin Coffee (LK) - Get Luckin Coffee Inc ADR Class A Report, the Chinese rival to Starbucks (SBUX) - Get Starbucks Corporation Report, said Tuesday that last week it received a notice of delisting of its shares from Nasdaq.
“The Listing Qualifications Staff cited two bases for the delisting determination,” Luckin said in a statement.
Those are “public interest concerns as raised by the fabricated transactions disclosed by the company April 2, and the company’s past failure to publicly disclose material information, citing a business model through which the previously disclosed fabricated transactions were executed.”
Luckin said it planned to request a hearing with Nasdaq over the issue and the stock will stay listed until that’s decided.
If a hearing is granted, it’s likely to take place 30 to 45 days after the date of the hearing request.
Luckin last week fired its chief executive, Jenny Zhiya Qian, and its chief operating officer, Jian Liu, as it attempted to weather multiple probes into allegations that it fabricated more than $300 million in sales last year.
Luckin said in April that it was assessing the impact of its investigation into the fake sales, which it traces back to the second quarter of 2019 and is linked to its COO, on its current financial statements.
"In addition to Ms. Qian and Mr. Liu, since the beginning of the Internal Investigation, the company has placed six other employees, who were involved in or had the knowledge of the fabricated transactions, on suspension or leave," Luckin said in a statement.
The company’s shares plummeted 76% on April 2 following news of its internal investigation to close at $6.40 each.
They last traded at $4.39 each on April 6, giving it a market value of just over $1.1 billion.