Wall Street Loves When Communist China Tells Sweet Billion-Dollar Lies
Ironically, it took a pandemic originating in China to expose the billion-dollar lies sold to international investors. April saw two big accounting scandals from two U.S.-listed Chinese companies. One was Luckin Coffee, a startup chain in China.
Three Wall Street firms — Credit Suisse, Goldman Sachs, and Morgan Stanley — made millions by underwriting Luckin’s 2019 initial public offering. Luckin’s IPO on the NASDAQ stock exchange granted enormous credibility to what was then a one-year-old company and enabled it to raise $645 million from investors based on a promise that Luckin would soon overtake Starbucks to become the largest coffee chain in the world. At the beginning of 2020, Luckin was worth $5 billion with a share price of $51.
Luckin’s luck ran out, however, under the weight of a two-month coronavirus lockdown in China. On April 2, after denying accusations of accounting fraud by U.S. short-sellers, the company finally admitted that its chief operating officer and several close employees fabricated 2019 sales by about 2.2 billion yuan ($310 million), meaning 75 percent of Luckin’s reported 2019 sales were fake.
Luckin’s stock price plummeted more than 80 percent that day, wiping out more than $2 billion of its market value. Four days later, Goldman Sachs disclosed that Luckin’s Chairman Charles Zhengyao Lu defaulted on a $518 million loan. While NASDAQ ultimately delisted Luckin stock, hundreds and thousands of investors, including many Americans, had already suffered significant losses.
Why does ANYONE Trust ANYTHING The Chinese Gov Says ...... their entire culture is built on lies, deception, and cheating
Ironically, it took a pandemic originating in China to expose the billion-dollar lies sold to international investors. April saw two big accounting scandals from two U.S.-listed Chinese companies. One was Luckin Coffee, a startup chain in China.
Three Wall Street firms — Credit Suisse, Goldman Sachs, and Morgan Stanley — made millions by underwriting Luckin’s 2019 initial public offering. Luckin’s IPO on the NASDAQ stock exchange granted enormous credibility to what was then a one-year-old company and enabled it to raise $645 million from investors based on a promise that Luckin would soon overtake Starbucks to become the largest coffee chain in the world. At the beginning of 2020, Luckin was worth $5 billion with a share price of $51.
Luckin’s luck ran out, however, under the weight of a two-month coronavirus lockdown in China. On April 2, after denying accusations of accounting fraud by U.S. short-sellers, the company finally admitted that its chief operating officer and several close employees fabricated 2019 sales by about 2.2 billion yuan ($310 million), meaning 75 percent of Luckin’s reported 2019 sales were fake.
Luckin’s stock price plummeted more than 80 percent that day, wiping out more than $2 billion of its market value. Four days later, Goldman Sachs disclosed that Luckin’s Chairman Charles Zhengyao Lu defaulted on a $518 million loan. While NASDAQ ultimately delisted Luckin stock, hundreds and thousands of investors, including many Americans, had already suffered significant losses.
Why does ANYONE Trust ANYTHING The Chinese Gov Says ...... their entire culture is built on lies, deception, and cheating