3 Reasons Luckin Coffee's Rally Is Just Getting Started
With its share price roughly doubling in the last 12 months, Luckin Coffee (OTC: LKNC.Y) has been one of the best performers in my investment portfolio. And while the Chinese coffee chain is still bouncing back from its previous management's mistakes, a stellar growth rate and reasonable valuation mean the bull run might be just getting started.
You might be familiar with Luckin Coffee for all the wrong reasons. In 2019, the company's then-CEO Jenny Zhiya Qian fabricated roughly $310 million in sales -- leading to fines and a delisting of the stock from the Nasdaq exchange (it now trades over the counter). The company also completed Chapter 15 bankruptcy proceedings, to reorganize its U.S. debt obligations without liquidating its international business.
But the crisis may have been a blessing in disguise. Luckin used the opportunity to change its management and begin prioritizing profitable growth instead of growth at all costs. These efforts have led to excellent operational results.
Source Fool.com
