Not Enough U.S. Cash Burning IPOs for You? Here Comes China’s Luckin Coffee

May 15 17:05 2019 Print This Article

Just as U.S. investors are trying to make sense of the Uber (UBER) and Lyft (LYFT) IPOs, both disastrous for those buying at the offer prices, on Friday we will get a U.S. listing of Chinese-operated, Cayman Island-incorporated coffee upstart Luckin Coffee. How much should investors pay for this so-called Starbucks of China (even though its business model is not copying the Seattle-based giant)? Quite frankly, who the heck knows? If that is not a sign that one should pass for now, I don’t know what is.

Below is a summary of Luckin’s financials from the IPO prospectus, though keep in mind its operating history is short (having gone from zero to 2,370 stores between October 2017 and March 2019).

This income statement reads like a Silicon Valley cloud-computing start-up, not a Chinese bricks and mortar coffee chainAs you can see, Luckin’s stores are run at a loss, with Q1 2019 sales of $71 million dwarfed by direct store operating costs of $83 million and another $25 million of marketing expense.

Read More

About Article Author

Peridot Capital Management

Peridot Capital Management LLC is a Seattle-based independent registered investment advisor (RIA), specializing in highly customized investment management services for individuals and families. Their strategy is based on historical stock market data dating back to the 1800’s which shows a strong inverse correlation between stock valuations and future share price performance.

  Categories:

Related Items

The Next Generation

Financial advisors receive multiple emails every week about the newest piece of financial technology. From portfolio management to financial planning software and everything in-between, it’s impossible to keep up with everything. And this is why we’re so excited to bring the next generation of c ...

Clips From Today’s Halftime Report

Final Trades: Twitter, Constellation Brands, Activision Blizzard and more from CNBC. ...The post Clips From Today’s Halftime Report appeared first on The Reformed Broker. ...

By the numbers: Robo-investing turns 5 in Canada

Robo-investing in Canada has just turned five. As one of Canada’s first robo-advisers, we wanted to take this opportunity to shine a light on the industry’s growth and how we’re helping Canadians build their wealth.“Since day one, our single goal has been to ensure that every Canadian has e ...

Shopify’s stock could hit $1,000, this fund manager says

It’s hard to argue with success and that goes double for Shopify (Shopify Stock Quote, Chart, News TSX:SHOP). The stock has lit up this year, outperforming practically every name out there. And while the ‘what goes up, must come down’ theory would seem to apply in this case, investors willing ...

Future of Sport Lab accepting applications for second cohort

Ryerson University and Maple Leaf Sports & Entertainment (MLSE) are now accepting applications for a second cohort of the Future of Sport Lab (FSL). Launched in 2018, the FSL incubator offers startups mentorship from the MLSE network, academic programming from the Ted Rogers School of Management, ...

Google parent company Alphabet has “absurd” growth: investor

Antitrust concerns continue to swirl around Google and its parent company Alphabet (Alphabet Stock Quote, Chart, News NASDAQ:GOOGL), the latest being reports that a group of US states will be investigating Big Tech’s impact on competition. But with the fallout likely years away, investors should ...

New Brunswick-based money saving app Quber raises $450,000

Moncton-based Quber, an app that aims to help users save money through fun games, has closed $450,000 in total funding. Of the overall funding, $200,000 came from the New Brunswick Innovation Foundation, while the rest of the money came from angel investors and the Quber founders themselves. “Ou ...

Dell OptiPlex 7070 Ultra hides a computer in its stand to save space

Dell today announced the OptiPlex 7070 Ultra, a modular compact PC designed for the space-constrained and open-plan workplaces. Whereas a traditional all-in-one systems feature integrated, difficult to remove hardware, Dell’s modular approach enables the system to be upgraded with higher-performi ...

Innovation Guelph receives $1.9 million federal investment for women entrepreneurship

Innovation Guelph, which supports local entrepreneurs through funding and programming, has received $1,879,983 from the federal government. The government’s investment is part of its $2 billion Women’s Entrepreneurship Strategy, which aims to double the number of women-owned businesses by 2025 ...

Can a Growth Scare Benefit Tech Stocks?

Given the recent volatility, investors may be wary of tech. Not so fast, Russ explains. ...