Interior designer Kim Bondy had never heard of Luckin Coffee Inc. when, she says, her financial adviser suggested investing in the fast-growing chain, often referred to as the Starbucks of China. The idea couldn’t have come at a worse time.
Shortly after her purchase of Luckin’s stock, the company disclosed that top executives had fabricated a chunk of its 2019 revenue. The shares, trading on the Nasdaq Stock Market, were subsequently suspended and have dropped almost 90% since April 1, leaving Bondy with an $85,000 loss. “It’s caused horrific financial stress,” says Bondy, who sold her house and vacation home to pay down a credit line.