Luckin Coffee's piping hot IPO

Credit: Reuters Studio
Published on May 17, 2019 - Duration: 01:03s

Luckin Coffee's piping hot IPO

The Chinese challenger to Starbucks, Luckin Coffee, saw its shares zoom up 47 percent at the open as it debuted on the Nasdaq.

But Fred Katayama reports, the startup warns it may keep losing money in the foreseeable future.

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Luckin Coffee's piping hot IPO

A PIPING hot debut for Luckin Coffee Friday.

The Chinese coffee chain that's challenging Starbucks on the mainland saw its shares surge 47 percent at the open on the Nasdaq.

The market now values the startup at more than $4 billion.

The Beijing-based chain raised more than half a billion dollars, making it the biggest public offering in the U.S. by a Chinese firm this year.

It comes amid an escalating trade war between the U.S. and China.

Just two years old, the aggressive startup will use the proceeds to further fuel its fast expansion.

It runs nearly 2400 stores in China some 1200 fewer than Starbucks.

But Luckin plans to add 2500 this year.

What makes it popular: cheap prices, big discounts, and fast deliveries of coffee that must be ordered on an app.

To rebound from its sales slump there, Starbucks teamed up with e-commerce giant Alibaba on coffee delivery last year.

But delivery and discounts come at a cost.

Luckin lost nearly half a billion dollars last year, and it warns it may keep losing money in the foreseeable future.

--------------- A steaming hot debut for Luckin Coffee Friday.

The Chinese coffee chain that's challenging Starbucks on the mainland saw its shares surge 47 percent at the open on the Nasdaq.

The market now values the startup at more than $4 billion.

The Beijing-based chain raised more than half a billion dollars, making it the biggest public offering in the U.S. by a Chinese firm.

It comes amid an escalating trade war between the U.S. and China.

Just two years old, the aggressive startup will use the proceeds to further fuel its fast expansion.

It runs nearly 2400 stores, some 1200 fewer than Starbucks.

But Luckin plans to add 2500 this year.

What makes it popular: cheap prices, big discounts, and fast deliveries of coffee that must be ordered on an app.

To rebound from its sales slump there, Starbucks teamed up with e-commerce giant Alibaba on coffee delivery.

But delivery and discounts come at a cost.

Luckin lost nearly half a billion dollars last year, and it warns it may keep losing money in the foreseeable future.

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