Luokung Technology

Luckin Coffee Inc is a China based company engaged in operation of coffee stores. It sources its Arabica coffee beans from various suppliers and engage World Barista Champion teams to design its coffee recipes. The company also has partnered with suppliers for other products such as juices and light meals.

LUCKIN COFFEE INC SP/ADR by Luckin Coffee Inc.

Luckin Coffee

News

Offerings

Consolidated Edison Reports 10.1M Share Common Stock Offering

CATB

Catabasis Pharma 13G Filing From Ra Capital Shows 7.5% Stake In Co.

Nouveau Monde Graphite Inc. (&ldquo;Nouveau Monde&rdquo; or the&nbsp;&ldquo;Company&rdquo;) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NMG#NYSE">NMG</a>, TSXV:<a class="ticker" href="https://www.benzinga.com/stock/NOU#TSXV">NOU</a>) today announced the launch of a proposed underwritten public offering (the &ldquo;Offering&rdquo;) of 7,000,000 of its common shares (the &ldquo;Common Shares&rdquo;). All of the Common Shares to be sold in the Offering will be offered by Nouveau Monde. Nouveau Monde also expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the Common Shares sold pursuant to the Offering (the &ldquo;Over-Allotment Option&rdquo;).

TSXV:NOU

Nouveau Monde Announces Launch Of 7M Share Public Offering Of Common Shares In United States And Canada

Shares of H&amp;R Block (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HRB#NYSE">HRB</a>) fell&nbsp;in after-market trading after the company reported Q4 results.
<h2>Quarterly Results</h2>
Earnings per share increased 71.43% over the past year to $5.16, which beat the estimate of $5.13.
Revenue of $2,328,000,000 rose by 28.69% from the same period last year, which missed the estimate of $2,350,000,000.
<h2>Guidance</h2>
Earnings guidance hasn&#39;t been issued by the company for now.
H&amp;R Block hasn&#39;t issued any revenue guidance for the time being.
<h2>How To Listen To The Conference Call</h2>
Date: Jun 15, 2021
Time: 04:30 PM
ET Webcast URL: <a href="https://edge.media-server.com/mmc/p/8gez77fo" title="https://edge.media-server.com/mmc/p/8gez77fo">https://edge.media-server.com/mmc/p/8gez77fo</a>
<h2>Recent Stock Performance</h2>
Company&#39;s 52-week high was at $26.23
Company&#39;s 52-week low was at $13.04
Price action over last quarter: Up 22.57%
<h2>Company Description</h2>
H&amp;R Block Inc provides income tax return preparation services, digital do-it-yourself tax solutions, and other services related to income tax preparation to the general public primarily in the United States, Canada, and Australia. The company mainly prepares tax returns for customers within the United States through its company-owned offices, franchise locations, and online tax software. The vast majority of H&amp;R Block&#39;s offices are located in the U.S. The company derives most of its total revenue from the U.S. assisted tax preparation fees. Revenue from franchise and product royalties and digital do-it-yourself tax solutions is also relatively significant.

Earnings

H&R Block: Q4 Earnings Insights

<h3>Gainers</h3>
<ul>
<li>Aemetis (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMTX#NASDAQ">AMTX</a>) shares increased by 1.67% to $14.0 during Tuesday's after-market session. Today's trading volume for this security ended up closing at 7.3K shares, which is 0.38 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $439.8 million. </li>
<li>Clean Energy Fuels (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CLNE#NASDAQ">CLNE</a>) shares increased by 1.35% to $11.26. Today's trading volume for this security ended up closing at 434.6K shares, which is 3.48 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $2.5 billion. </li>
<li>Recon Technology (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RCON#NASDAQ">RCON</a>) shares increased by 1.1% to $4.57. Recon Technology's trading volume hit 78.5K shares by close, accounting for 2.29% of its average volume over the last 100 days. The company's market cap stands at $83.6 million. </li>
</ul>
<h3>Losers</h3>
<ul>
<li>Torchlight Energy Res (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TRCH#NASDAQ">TRCH</a>) stock fell 4.15% to $4.86 during Tuesday's after-market session. Torchlight Energy Res's trading volume hit 1.2 million shares by close, accounting for 14.11% of its average volume over the last 100 days. The company's market cap stands at $707.4 million. </li>
<li>W&amp;T Offshore (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WTI#NYSE">WTI</a>) shares fell 1.8% to $4.65. Today's trading volume for this security ended up closing at 112.9K shares, which is 4.29 percent of its average volume over the last 100 days. The company's market cap stands at $661.7 million. </li>
<li>Liberty Oilfield Services (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LBRT#NYSE">LBRT</a>) shares declined by 1.2% to $14.9. Liberty Oilfield Services's trading volume hit 131.3K shares by close, accounting for 9.99% of its average volume over the last 100 days. The company's market cap stands at $2.6 billion. </li>
<li>Southwestern Energy (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SWN#NYSE">SWN</a>) shares declined by 1.18% to $5.47. Southwestern Energy's trading volume hit 963.8K shares by close, accounting for 6.71% of its average volume over the last 100 days. The market value of their outstanding shares is at $3.7 billion. </li>
<li>Alto Ingredients (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ALTO#NASDAQ">ALTO</a>) stock fell 1.12% to $6.09. This security traded at a volume of 103.3K shares come close, making up 3.13% of its average volume over the last 100 days. </li>
</ul>

Movers

ALTO

AMTX

CLNE

LBRT

RCON

TRCH

8 Energy Stocks Moving In Tuesday's After-Market Session

<h3>Gainers</h3>
<ul>
<li>Forward Industries (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FORD#NASDAQ">FORD</a>) stock moved upwards by 53.47% to $4.19 during Tuesday's after-market session. Today's trading volume for this security ended up closing at 1.0 million shares, which is 762.41 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $41.7 million. </li>
<li>Xcel Brands (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/XELB#NASDAQ">XELB</a>) stock rose 22.82% to $2.53. At the close, Xcel Brands's trading volume reached 503.1K shares. This is 22.02% of its average volume over the last 100 days. The market value of their outstanding shares is at $48.8 million. </li>
<li>Tuniu (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TOUR#NASDAQ">TOUR</a>) shares rose 10.14% to $3.04. At the close, Tuniu's trading volume reached 14.3K shares. This is 1.62% of its average volume over the last 100 days. The market value of their outstanding shares is at $375.4 million. </li>
<li>Comstock Holding Co (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CHCI#NASDAQ">CHCI</a>) shares rose 2.16% to $5.65. At the close, Comstock Holding Co's trading volume reached 263 shares. This is 0.06% of its average volume over the last 100 days. The company's market cap stands at $46.9 million. </li>
<li>Arcimoto (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FUV#NASDAQ">FUV</a>) shares moved upwards by 1.8% to $12.99. At the close, Arcimoto's trading volume reached 60.8K shares. This is 3.98% of its average volume over the last 100 days. The company's market cap stands at $464.8 million. </li>
<li>Meten EdtechX Education (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/METX#NASDAQ">METX</a>) stock rose 1.44% to $0.98. Trading volume for this security closed at 231, accounting for 0.0% of its average full-day volume over the last 100 days. The company's market cap stands at $102.2 million. </li>
</ul>
<h3>Losers</h3>
<ul>
<li>Blue Apron Hldgs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/APRN#NYSE">APRN</a>) shares decreased by 13.05% to $4.8 during Tuesday's after-market session. Today's trading volume for this security ended up closing at 140.4K shares, which is 24.52 percent of its average volume over the last 100 days. The company's market cap stands at $86.6 million. </li>
<li>DAVIDsTEA (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DTEA#NASDAQ">DTEA</a>) shares fell 6.03% to $4.99. DAVIDsTEA's trading volume hit 25.1K shares by close, accounting for 9.84% of its average volume over the last 100 days. The company's market cap stands at $131.0 million. As per the press release, Q1 earnings came out today. </li>
<li>Elys Game Technology (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ELYS#NASDAQ">ELYS</a>) shares decreased by 2.65% to $4.41. Elys Game Technology's trading volume hit 1.4K shares by close, accounting for 0.24% of its average volume over the last 100 days. The market value of their outstanding shares is at $97.0 million. </li>
<li>Trxade Health (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MEDS#NASDAQ">MEDS</a>) shares declined by 2.6% to $4.88. At the close, Trxade Health's trading volume reached 3.0K shares. This is 0.1% of its average volume over the last 100 days. The company's market cap stands at $39.6 million. </li>
<li>Lordstown Motors (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RIDE#NASDAQ">RIDE</a>) shares declined by 1.85% to $10.12. At the close, Lordstown Motors's trading volume reached 176.3K shares. This is 1.43% of its average volume over the last 100 days. The company's market cap stands at $1.7 billion. </li>
<li>La-Z-Boy (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LZB#NYSE">LZB</a>) shares decreased by 1.85% to $41.5. This security traded at a volume of 103.6K shares come close, making up 32.22% of its average volume over the last 100 days. The market value of their outstanding shares is at $1.9 billion. The company's, Q4 earnings came out today. </li>
</ul>

APRN

CHCI

DTEA

ELYS

FORD

MEDS

Meten EdtechX Education Group Ltd Ordinary Shares

METX

Lordstown Motors Corp. - Class A Common Stock

RIDE

TOUR

XELB

12 Consumer Discretionary Stocks Moving In Tuesday's After-Market Session

Shares of La-Z-Boy (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LZB#NYSE">LZB</a>) fell in after-market trading after the company reported Q4 results.
<h2>Quarterly Results</h2>
Earnings per share increased 77.55% over the past year to $0.87, which beat the estimate of $0.74.
Revenue of $519,470,000 rose by 41.44% from the same period last year, which beat the estimate of $498,530,000.
<h2>Looking Ahead</h2>
La-Z-Boy Sees Ongoing Incremental Increases In Manufacturing Capacity Throughout FY22
La-Z-Boy Says Sees Temporary Negative Impact To Profit Margins Due To &#39;dramatic raw material price increases which will only be offset by previously announced pricing actions...&#39;
<h2>Price Action</h2>
52-week high: $46.74
52-week low: $25.53
Price action over last quarter: Up 13.65%
<h2>Company Profile</h2>
La-Z-Boy Inc is a U.S.-based company that manufactures, distributes, and retails upholstery furniture products. It is a producer of reclining chairs and distributors of residential furniture in the U.S. The company chiefly operates in the United States but also has secondary operations in Canada and other countries. The company&#39;s segments include upholstery, which manufactures and imports upholstered furniture; case goods, which imports and distributes wooden furniture; and retail, which sells upholstered and case goods furniture to the end consumer. The majority of the company&#39;s revenue is derived from its upholstery furniture segment. Some of the core brands of the firm include England, Kincaid, American Drew, and Hammary.

La-Z-Boy: Q4 Earnings Insights

<h3>Gainers</h3>
<ul>
<li>NeuroMetrix (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NURO#NASDAQ">NURO</a>) stock rose 7.05% to $3.64 during Tuesday's after-market session. Today's trading volume for this security ended up closing at 21.6K shares, which is 25.49 percent of its average volume over the last 100 days. The company's market cap stands at $13.8 million. </li>
<li>SINTX Technologies (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SINT#NASDAQ">SINT</a>) stock rose 4.66% to $1.57. Today's trading volume for this security ended up closing at 230 shares, which is 0.03 percent of its average volume over the last 100 days. The company's market cap stands at $38.7 million. </li>
<li>Eton Pharmaceuticals (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ETON#NASDAQ">ETON</a>) stock moved upwards by 3.8% to $7.09. Today's trading volume for this security ended up closing at 71.0K shares, which is 17.86 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $173.7 million. </li>
<li>Diffusion Pharmaceuticals (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DFFN#NASDAQ">DFFN</a>) shares moved upwards by 3.74% to $0.77. This security traded at a volume of 384 shares come close, making up 0.02% of its average volume over the last 100 days. The market value of their outstanding shares is at $78.4 million. </li>
<li>Verastem (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VSTM#NASDAQ">VSTM</a>) shares moved upwards by 3.64% to $4.84. Today's trading volume for this security ended up closing at 149.6K shares, which is 5.57 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $832.0 million. </li>
<li>Eyenovia (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EYEN#NASDAQ">EYEN</a>) stock moved upwards by 3.18% to $5.5. Trading volume for this security closed at 3.1K, accounting for 1.73% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $142.2 million. </li>
</ul>
<h3>Losers</h3>
<ul>
<li>Obalon Therapeutics (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/OBLN#NASDAQ">OBLN</a>) stock decreased by 9.84% to $2.75 during Tuesday's after-market session. This security traded at a volume of 308.1K shares come close, making up 8.3% of its average volume over the last 100 days. The company's market cap stands at $27.5 million. </li>
<li>Aptinyx (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/APTX#NASDAQ">APTX</a>) shares decreased by 5.74% to $3.29. Trading volume for this security closed at 52.8K, accounting for 5.45% of its average full-day volume over the last 100 days. The company's market cap stands at $224.2 million. </li>
<li>Protagenic Therapeutics (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PTIX#NASDAQ">PTIX</a>) shares fell 4.64% to $2.88. Trading volume for this security closed at 84.2K, accounting for 1.15% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $42.1 million. </li>
<li>Clearside Biomedical (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CLSD#NASDAQ">CLSD</a>) stock decreased by 3.85% to $4.0. At the close, Clearside Biomedical's trading volume reached 352.6K shares. This is 159.57% of its average volume over the last 100 days. The market value of their outstanding shares is at $230.3 million. </li>
<li>OncoSec Medical (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ONCS#NASDAQ">ONCS</a>) stock fell 3.59% to $3.5. OncoSec Medical's trading volume hit 900 shares by close, accounting for 0.57% of its average volume over the last 100 days. The market value of their outstanding shares is at $137.1 million. </li>
<li>Millendo Therapeutics (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MLND#NASDAQ">MLND</a>) shares fell 3.48% to $1.39. At the close, Millendo Therapeutics's trading volume reached 8.7K shares. This is 0.52% of its average volume over the last 100 days. The company's market cap stands at $26.4 million. </li>
</ul>

APTX

CLSD

DFFN

ETON

EYEN

MLND

NURO

OBLN

ONCS

PTIX

SINT

VSTM

12 Health Care Stocks Moving In Tuesday's After-Market Session

<h3>Gainers</h3>
<ul>
<li>SGOCO Group (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SGOC#NASDAQ">SGOC</a>) shares rose 5.63% to $2.25 during Tuesday's after-market session. Today's trading volume for this security ended up closing at 506 shares, which is 0.44 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $226.3 million. </li>
<li>SPI Energy (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SPI#NASDAQ">SPI</a>) shares increased by 3.35% to $6.78. At the close, SPI Energy's trading volume reached 6.9K shares. This is 1.21% of its average volume over the last 100 days. The company's market cap stands at $161.7 million. </li>
<li>Marin Software (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MRIN#NASDAQ">MRIN</a>) shares rose 3.14% to $1.59. This security traded at a volume of 1.3K shares come close, making up 0.35% of its average volume over the last 100 days. The company's market cap stands at $17.4 million. </li>
<li>Verb Tech (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VERB#NASDAQ">VERB</a>) shares moved upwards by 1.6% to $1.27. Today's trading volume for this security ended up closing at 2.5K shares, which is 0.15 percent of its average volume over the last 100 days. The company's market cap stands at $80.4 million. </li>
<li>Amtech Systems (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASYS#NASDAQ">ASYS</a>) stock increased by 1.31% to $10.0. Amtech Systems's trading volume hit 1.2K shares by close, accounting for 0.56% of its average volume over the last 100 days. The market value of their outstanding shares is at $142.4 million. </li>
<li>MoSys (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MOSY#NASDAQ">MOSY</a>) stock increased by 1.26% to $6.38. Trading volume for this security closed at 2.4K, accounting for 0.04% of its average full-day volume over the last 100 days. The company's market cap stands at $55.0 million. </li>
</ul>
<h3>Losers</h3>
<ul>
<li>ALJ Regional Hldgs (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ALJJ#NASDAQ">ALJJ</a>) shares fell 6.88% to $1.49 during Tuesday's after-market session. ALJ Regional Hldgs's trading volume hit 636 shares by close, accounting for 0.44% of its average volume over the last 100 days. The market value of their outstanding shares is at $63.0 million. </li>
<li>Powerbridge Technologies (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PBTS#NASDAQ">PBTS</a>) shares decreased by 2.64% to $1.48. Today's trading volume for this security ended up closing at 1.1K shares, which is 0.12 percent of its average volume over the last 100 days. The market value of their outstanding shares is at $67.8 million. </li>
<li>ALFI (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ALF#NASDAQ">ALF</a>) shares fell 2.59% to $6.79. This security traded at a volume of 5.2 million shares come close, making up 147.12% of its average volume over the last 100 days. </li>
<li>Oracle (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ORCL#NYSE">ORCL</a>) stock declined by 2.58% to $79.5. Trading volume for this security closed at 2.1 million, accounting for 17.75% of its average full-day volume over the last 100 days. The market value of their outstanding shares is at $229.2 billion. As per the press release, Q4 earnings came out today. </li>
<li>Photronics (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PLAB#NASDAQ">PLAB</a>) stock declined by 2.09% to $14.01. Photronics's trading volume hit 13.9K shares by close, accounting for 2.94% of its average volume over the last 100 days. The market value of their outstanding shares is at $868.3 million. </li>
<li>UTime (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/UTME#NASDAQ">UTME</a>) shares decreased by 2.05% to $48.0. Trading volume for this security closed at 621, accounting for 0.18% of its average full-day volume over the last 100 days. </li>
</ul>

ALJJ

ASYS

MOSY

MRIN

ORCL

PBTS

PLAB

SGOC

UTME

VERB

12 Information Technology Stocks Moving In Tuesday's After-Market Session

UPDATE: Aptinyx Says Co. Providing Updated Statistical Analysis For Exploratory Phase 2 Study, Which Has No Impact On Study Conclusions

Elys Game Technology Files For Mixed Shelf Of Up To $100M

Commodities

Markets

API Reports Oil Inventories Figures For Week Ended May 11, 2021: Crude Oil Inventories Draw 8.537M Barrels, Gasoline Inventories Build 2.852M Barrels, Distillate Inventories Build 1.956M Barrels

UPDATE: Aptinyx Says Identified Statistical Error Made By Contract Research Organization That Performed Statistical Analysis Of Previously-Completed Exploratory Phase 2 Study In Post-Traumatic Stress Disorder

WIIM

Forward Industries shares are trading higher after the company announced a U.S. distribution agreement with Chipolo.

Financing

PARR

Par Pacific Announces Paydown Of $85M Principal Amount Of Debt

Guidance

UPDATE: La-Z-Boy Says Sees Temporary Negative Impact To Profit Margins Due To 'dramatic raw material price increases which will only be offset by previously announced pricing actions...'

Dividends

W. R. Berkley Corporation Declares Special Cash Dividend On Its Common Stock Of $0.50/Share To Be Paid On July 6, 2021

Shares of Oracle (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ORCL#NYSE">ORCL</a>) decreased after the company reported Q4 results.
<h2>Quarterly Results</h2>
Earnings per share were up 28.33% over the past year to $1.54, which beat the estimate of $1.31.
Revenue of $11,227,000,000 higher by 7.53% year over year, which beat the estimate of $11,040,000,000.
<h2>Guidance</h2>
Oracle hasn&#39;t issued any earnings guidance for the time being.
Revenue guidance hasn&#39;t been issued by the company for now.
<h2>Conference Call Details</h2>
Date: Jun 15, 2021
Time: 05:00 PM
ET Webcast URL: <a href="https://event.on24.com/eventRegistration/EventLobbyServlet?target=reg20.jsp&amp;referrer=https%3A%2F%2Finvestor.oracle.com%2F&amp;eventid=3082039&amp;sessionid=1&amp;key=C6E78F5FD063829F89F7A664C39525BC&amp;regTag=&amp;V2=false&amp;sourcepage=register" title="https://event.on24.com/eventRegistration/EventLobbyServlet?target=reg20.jsp&amp;referrer=https%3A%2F%2Finvestor.oracle.com%2F&amp;eventid=3082039&amp;sessionid=1&amp;key=C6E78F5FD063829F89F7A664C39525BC&amp;regTag=&amp;V2=false&amp;sourcepage=register">https://event.on24.com/eventRegistration/EventLobbyServlet?target=reg20.jsp&amp;referrer=https%3A%2F%2Finvestor.oracle.com%2F&amp;eventid=3082039&amp;sessionid=1&amp;key=C6E78F5FD063829F89F7A664C39525BC&amp;regTag=&amp;V2=false&amp;sourcepage=register</a>
<h2>Technicals</h2>
Company&#39;s 52-week high was at $85.03
52-week low: $50.91
Price action over last quarter: Up 20.89%
<h2>Company Overview</h2>
Oracle provides database technology and enterprise resource planning, or ERP, software to enterprises around the world. Founded in 1977, Oracle pioneered the first commercial SQL-based relational database management system. Today, Oracle has 430,000 customers in 175 countries, supported by its base of 136,000 employees.

Oracle: Q4 Earnings Insights

Travel

General

FAA Says Southwest Airlines Ground Stop Has Been Lifted

H&R Block Raises Quarterly Dividend From $0.26 To $0.27/Share

Luckin Coffee Inc. (the &ldquo;Company&rdquo;) (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) announced that its Special Committee of the Board of Directors (the &ldquo;Special Committee&rdquo;), with the assistance of its advisors, Kirkland &amp; Ellis International LLP and FTI Consulting, has substantially completed its independent internal investigation (the &ldquo;Internal Investigation&rdquo;) into the issues disclosed in the press release issued by the Company on April 2, 2020.&nbsp; &nbsp;&nbsp;

The Special Committee was formed on March 19, 2020 and authorized by the Board of Directors (the &ldquo;Board&rdquo;) to access documents, records and information of the Company, and to conduct interviews with any employee, officer and director, as the Special Committee deemed appropriate.&nbsp; In the course of the Internal Investigation, the Special Committee and its advisors reviewed over 550,000 documents collected from over 60 custodians, interviewed over 60 witnesses, and performed extensive forensic accounting and data analytics testing.&nbsp;

Based on its work, the Special Committee has found that the fabrication of transactions began in April 2019 and that, as a result, the Company&rsquo;s net revenue in 2019 was inflated by approximately RMB 2.12 billion ( consisting of RMB 0.25 billion in the second quarter, RMB 0.70 billion in the third quarter, and RMB 1.17 billion in the fourth quarter.)&nbsp; The Company&rsquo;s costs and expenses were inflated by RMB 1.34 billion in 2019 (consisting of RMB 0.15 billion in the second quarter, RMB 0.52 billion in the third quarter, and RMB 0.67 billion in the fourth quarter).

Evidence discovered to date demonstrates that the Company&rsquo;s former Chief Executive Officer, Ms. Jenny Zhiya Qian, former Chief Operating Officer, Mr. Jian Liu and certain employees reporting to them participated in the fabricated transactions and that the funds supporting the fabricated transactions were funneled to the Company through a number of third parties associated with the Company employees and/or related parties.&nbsp;

Following the Special Committee&rsquo;s recommendations, the Board terminated its former Chief Executive Officer and former Chief Operating Officer based on evidence demonstrating their participation in the fabricated transactions.&nbsp; In addition, the Board resolved to require Mr. Charles Zhengyao Lu to resign as a director and the chairman of the Board and a meeting of the Board will be held on July 2, 2020 to consider the proposal to remove Mr. Charles Zhengyao Lu, as a director and the chairman of the Board. The proposed resignation and removal regarding Mr. Charles Zhengyao Lu was requested by the majority of directors of the Board, and based on findings presented by and the recommendations of the Special Committee. &nbsp;The Special Committee based its recommendations regarding Mr. Charles Zhengyao Lu on documentary and other evidence identified in the Internal Investigation and its assessment of Mr. Charles Zhengyao Lu&rsquo;s degree of cooperation in the Internal Investigation. The Board has further resolved to terminate 12 other employees who, at the direction of the former Chief Executive Officer and former Chief Operating Officer, participated in, and/or had knowledge of, the fabricated transactions, including previously suspended employees.&nbsp; An additional 15 employees are subject to other disciplinary actions.&nbsp; In addition, the Company is in the process of terminating relationships with all third parties involved in the fabricated transactions. &nbsp;&nbsp;

In connection with the Special Committee&rsquo;s findings,&nbsp;the Company has implemented several immediate enhancements to its finance functions and engaged an internal controls consultant to evaluate the existing controls environment and recommend enhancements to detect and prevent misconducts in the future.&nbsp; The Company is chartering an internal audit function to test and evaluate its control functions.&nbsp;The Company will also strengthen ongoing compliance training to its employees.

The Special Committee may continue to perform certain additional investigation steps if additional relevant information becomes available.&nbsp; &nbsp;

Luckin Coffee Reports Substantially Completed Independent Internal Probe Into Issues Disclosed On Apr. 2, 2020

Luckin Coffee Inc. (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) Chairman Charles Zhengyao Lu was ousted from his role at the company in a shareholders meeting on Sunday, Bloomberg <a href="https://www.bloomberg.com/news/articles/2020-07-05/luckin-shareholders-vote-to-remove-chairman-lu-163-com?sref=V7uxlNge">reported</a>.

<h3>What Happened</h3>

Lu had called the &quot;extraordinary general meeting,&quot; as he also <a href="https://www.benzinga.com/news/20/06/16422343/luckin-chairman-and-board-members-try-to-oust-each-other-after-giving-up-on-nasdaq-listing">sought removal</a> of one of the independent members of the Luckin board, Sean Shao.

According to local media sources, Shao, along with two other board members, has&nbsp;also been forced out, Bloomberg noted.

A separate <a href="https://www.wsj.com/articles/luckin-coffee-probe-concludes-chairman-knew-or-should-have-known-of-fabricated-transactions-11593953644?mod=lead_feature_below_a_pos1">report</a> from the Wall Street Journal said that an internal investigation of the company found that Lu knew or should have known about the $310 million <a href="https://www.benzinga.com/news/20/04/15727847/luckin-coffee-crashes-after-company-admits-coo-fabricated-transactions?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+benzinga+%28Benzinga+News+Feed%29">securities fraud</a> at the company.

Lu also didn&#39;t fully cooperate with the investigation conducted by a special committee of Luckin&#39;s board and law firm Kirkland &amp; Ellis LLP, the people familiar with the matter told the Journal.

The probe found evidence that Lu had knowledge of some of the fabricated transactions but failed to disclose them, the Journal reported.

Lu dubbed the report of the probe as &quot;rumor&quot; in a statement to the Journal.

<h3>Price Action</h3>

Luckin shares closed nearly 3.5% lower at $2.52 in the otc market on Thursday. The company&#39;s shares are in the process of getting listed from the Nasdaq Stock Market.

Penny Stocks

Legal

Management

Media

Luckin Coffee Chairman Reportedly Ousted As Internal Probe Finds Wrongdoing

Pre-open movers

U.S. stock futures traded higher in early pre-market trade, after posting gains in the prior session. US Services Purchasing Managers&#39; Index for June will be released at 9:45 a.m. ET, while the ISM&#39;s non-manufacturing index for June is scheduled for release at 10:00 a.m. ET.

The U.S. has the highest number of COVID-19 cases and deaths in the world, with total infections in the country exceeding 2,888,720 with around 129,940 deaths. Brazil confirmed over 1,603,050 cases, while India reported a total of at least 697,410 confirmed cases.

Futures for the Dow Jones Industrial Average climbed 400 points to 26,159 while the Standard &amp; Poor&rsquo;s 500 index futures traded rose 39.85 points to 3,168.75. Futures for the Nasdaq 100 index rose 134 points to 10,489.75.

<a href="https://www.benzinga.com/investing/global-oil-storage-trends/">Oil prices </a>traded higher as Brent crude futures rose 1.8% to trade at $43.58 per barrel, while US WTI crude futures rose 0.8% to trade at $40.96 a barrel.

&nbsp;

A Peek Into Global Markets

 
European markets were higher today, with the Spanish Ibex Index rising 2.7% and STOXX Europe 600 Index gaining 1.6%. The UK&#39;s FTSE index was trading higher by 2.2%, while French CAC 40 Index gained 2% and German DAX 30 gained 2.1%.

In Asian markets, Japan&rsquo;s Nikkei rose 1.83%, Hong Kong&rsquo;s Hang Seng Index rose 3.81%, China&rsquo;s Shanghai Composite Index gained 5.71% and India&rsquo;s BSE Sensex rose 1.5%.

 
Broker Recommendation

Analysts at Baird downgraded The Cooper Companies, Inc. (NYSE:<a class="ticker" href="/stock/COO#NYSE">COO</a>) from Outperform to Neutral and lowered the price target from $335 to $291.

Cooper Companies shares rose 0.9% to close at $290.07 on Thursday.

 
Breaking News 

<ul>
	<li>Uber Technologies Inc (NYSE:<a class="ticker" href="/stock/UBER#NYSE">UBER</a>) will acquire Postmates Inc, an online food delivery service, for $2.65 billion in an all-stock deal, Bloomberg reported.</li>
	<li>OrganiGram Holdings Inc (NASDAQ:<a class="ticker" href="/stock/OGI#NASDAQ">OGI</a>) has announced a round of layoffs, which includes a staff reduction of 25%.</li>
	<li>Dominion Energy Inc (NYSE:<a class="ticker" href="/stock/D#NYSE">D</a>) agreed to sell gas transmission and storage assets to Berkshire Hathaway Energy in an all-cash deal valued at $9.7 billion.</li>
	<li>Luckin Coffee Inc - ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) Chairman Charles Zhengyao Lu was ousted from his role at the company in a shareholders meeting on Sunday, Bloomberg reported.</li>
</ul>

Eurozone

Futures

Global

Pre-Market Outlook

A Peek Into The Markets: US Stock Futures Signal Higher Start On Wall Street

Luckin Coffee Inc&nbsp;(OTC:<a href="https://www.benzinga.com/stock/lkncy#OTC" target="_blank">&nbsp;LKNCY</a>)<a href="https://www.benzinga.com/pressreleases/20/07/g16608632/luckin-coffee-announces-changes-to-board-of-directors-and-the-appointment-of-new-chairman" target="_blank">&nbsp;announced</a>&nbsp;the appointment of a new chairman and directors to its board, following an extraordinary general meeting held Monday.

<h3>What Happened</h3>

Acting Chief Executive Officer and existing board member, Jinyi Guo, has been appointed the chairman and the CEO of the Chinese coffee chain company.&nbsp;

Charles Zhengyao Lu, the former chairman of Luckin, ceases to be a director.

The ouster of Lu comes weeks after an<a href="https://www.cnbc.com/2020/07/13/luckin-coffee-ousts-chairman-lu-names-guo-as-ceo.html" target="_blank">&nbsp;earlier attempt</a>&nbsp;to do the same failed; Lu is the co-founder of the company.

Luckin appointed two new independent directors on Monday. Another two directors were named earlier on July 5, noted CNBC.

<h3>Why It Matters</h3>

It was<a href="https://www.benzinga.com/news/20/07/16509545/luckin-coffee-chairman-reportedly-ousted-as-internal-probe-finds-wrongdoing" target="_blank">&nbsp;reported</a>&nbsp;earlier that Lu was in the know of a $310 million securities fraud at Luckin, which led to an investigation conducted by the company&rsquo;s board and law firm Kirkland &amp; Ellis LLP.

It is alleged that Lu did not fully cooperate with the investigations.

Earlier in June, Lu and Luckin board members tried to<a href="https://www.benzinga.com/news/20/06/16422343/luckin-chairman-and-board-members-try-to-oust-each-other-after-giving-up-on-nasdaq-listing" target="_blank">&nbsp;oust</a>&nbsp;each other after the Beijing-based company got delisted from Nasdaq in the wake of the fraud. Luckin did not contest the delisting.

<h3>Price Action</h3>

On Monday, Luckin Coffee OTC shares traded 22.04% lower at $2.9.

Image: Luckin Coffee

Luckin Coffee Confirms Lu's Ouster, Appoints New Chairman, Directors

iQiyi, Inc.&nbsp;(NASDAQ:<a class="ticker" href="/stock/IQ#NASDAQ">IQ</a>) shares dropped more than 12% in the after-hours session Thursday as the company revealed it&#39;s&nbsp;under investigation from the United States Securities and Exchange Commission.

What Happened:&nbsp;The Chinese video-streaming service&nbsp;akin to Netflix Inc (NASDAQ:<a class="ticker" href="/stock/NFLX#NASDAQ">NFLX</a>) said the SEC is seeking financial and operating records dating from January 1, 2018, CNBC <a href="https://www.cnbc.com/2020/08/14/iqiyi-sec-investigation-into-fraud-allegations-shares-plunge.html">reported</a>.

The video streamer said the federal agency has also asked for documents related to acquisitions and investments identified in a Wolfpack Research report dating back to April.

Why It Matters: Wolfpack&nbsp;claimed at the time&nbsp;that iQiyi had been <a href="https://www.benzinga.com/news/20/04/15762887/the-netflix-of-china-inflating-numbers-since-before-ipo-short-seller-that-warned-against-luckin-coff">fudging user numbers</a> since its initial public offering in 2018.&nbsp;In 2019 alone, it inflated revenue by up to $1.8 billion, according to the Muddy Waters Research-backed research firm.

The report was released days after Luckin Coffee Inc (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>), a China-based coffee chain, admitted its Chief Operating Officer <a href="https://www.benzinga.com/news/20/04/15727847/luckin-coffee-crashes-after-company-admits-coo-fabricated-transactions">inflated sales numbers</a> in previous SEC filings.&nbsp;

iQiyi was spun off from search engine giant Baidu, Inc (NASDAQ:<a class="ticker" href="/stock/BIDU#NASDAQ">BIDU</a>) in an IPO, <a href="https://ir.iqiyi.com/node/6826/html">raising</a>&nbsp;$2.2 billion.

The streaming platform&#39;s&nbsp;membership revenue grew 19% year-over-year in the latest&nbsp;quarter, while <a href="http://ir.baidu.com/news-releases/news-release-details/baidu-announces-second-quarter-2020-results">advertising revenue</a> fell 28%.

Price Action: iQiyi shares fell 12.36% at $19 in the after-hours session Thursday, after the revelation. It had closed the regular session 2.4% lower at $21.68.

Government

Regulations

Short Sellers

'The Netflix Of China' iQiyi Tanks 12% On SEC Probe Revelation

Chinese online education stock GSX Techedu Inc (NYSE:<a class="ticker" href="/stock/GSX#NYSE">GSX</a>) is down 34.1% since Aug.&nbsp;6, largely due to reports from short sellers Citron Research and Muddy Waters Research accusing the company of being a fraud.

According to S3 Partners analyst Ihor Dusaniwsky, GSX was the most aggressively shorted stock of the past week.

Fraud Allegations: In the previous five trading days, GSX experienced $923 million in new short-selling activity, Dusaniwsky said. Citron, Muddy Waters and <a href="https://grizzlyreports.com/gsx-update-6-2-2020/">Grizzly Research</a> have been accusing GSX of fraud throughout 2020.

&ldquo;My children love TikTok, We own $BABA, but $GSX continues to be a stock fraud. Using this opp. to add to a position. Confidence in the auditors/regulators. Look at the chart on Wirecard you will know that shorting isn&#39;t easy but neither is maintaining fraudulent financials,&rdquo; <a href="https://twitter.com/CitronResearch/status/1291747709850804224">Citron tweeted</a> on Aug.&nbsp;7.

Dusaniwsky said GSX short interest exploded from around 12.2 million shares to 42.1 million shares from the end of March to mid-June. From that point, heavy losses drove short sellers away from the stock in droves, and short interest dropped back down to 20.3 million shares by Aug.&nbsp;10.

Dusaniwsky said GSX short-selling trends have once again taken an abrupt 180-degree turn, with 13 million new shares sold short in the past week.

Huge Losses For Short Sellers: GSX&rsquo;s short interest now stands at $3 billion, an extremely high 25.9% of the stock&rsquo;s total float. Despite the fraud accusations, Dusaniwsky said GSX short sellers have had extremely bad timing with the volatile stock year-to-date. GSX short sellers have endured $2.1 billion in mark-to-market losses so far in 2020.

In the near-term, Dusaniwsky said GSX short selling will likely continue as long as the stock continues to trend lower.

&ldquo;Short sellers may be looking to ride GSX&rsquo;s stock price back down into the $40&rsquo;s and even lower 
if there is any traction to the &lsquo;fraud&rsquo; accusations,&rdquo; he said.

Benzinga&rsquo;s Take: Luckin Coffee Inc - ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) and TAL Education Group (NYSE:<a class="ticker" href="/stock/TAL#NYSE">TAL</a>) are just two examples of a number of U.S.-listed Chinese companies that have admitted to fraud in recent years. If China continues to allow its companies to deceive American investors, it will have an increasingly difficult time tapping the U.S. equity market.

Related Links:

<a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/08/17173791/cannabis-short-sellers-earn-another-402m-in-profits-so-far-in-2020">Cannabis Short Sellers Earn Another $402M In Profits So Far In 2020 </a>

<a href="https://www.benzinga.com/news/20/04/15767463/one-theme-is-popping-up-among-these-chinese-companies-fraud">One Theme Is Popping Up Among These Chinese Companies: Fraud</a>

Analyst Color

Short Ideas

Analyst Ratings

Trading Ideas

Short Sellers Piling Into GSX Techedu Following Fraud Accusations

Shares of chinese online education company GSX Techedu Inc (NYSE:<a class="ticker" href="/stock/GSX#NYSE">GSX</a>)&nbsp;dropped in the regular and after-hours session on Wednesday, as reports suggested the company is under probe from the Securities and Exchange Commission over&nbsp;allegations that its sales numbers are fudged.

What Happened: According to Financial Times, the company received a notice from the SEC for sharing financial and operating records from 2017 onwards. The FT report comes just after the company announced a 367% bump in its second-quarter net revenues on a year over year basis. 
Short-sellers flagged inconsistencies in the company&rsquo;s <a href="http://www.benzinga.com/news/earnings/20/09/17347069/recap-gsx-techedu-q2-earnings">earnings release</a> were declared on Wednesday.

Carson Block from Muddy Waters Research claimed in May that almost 80% of the users in the GSX platform were fake, FT noted. Whereas another short seller from Citron Research, Andrew Left, feels that conducting proper audits could bring down the stock price to zero and lead to delisting the company.

Why Does It Matter: Investor faith in Chinese companies <a href="http://www.benzinga.com/news/20/04/15786108/luckin-coffee-fraud-has-shaken-investor-faith-in-us-listed-chinese-companies-long-term-backer-citron">started dwindling</a> after reports of the Luckin Coffee Inc. (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) fraud emerged, according to Left. It was not long before Muddy Waters Research <a href="http://www.benzinga.com/news/20/04/15767463/one-theme-is-popping-up-among-these-chinese-companies-fraud">claimed</a> that Chinese streaming video-on-demand&nbsp;platform IQIYI Inc (NASDAQ:<a class="ticker" href="/stock/IQ#NASDAQ">IQ</a>) 2019 revenues were inflated by $1.13 billion. 

Price Movement: GSX shares closed 12% lower at $83.28 on Wednesday, and traded another 1.5% lower at $82 in the after-hours session.

GSX Techedu Shares Drop 13.6% As SEC Probes Short Seller Claims Of Tampered Earnings

Trade tensions between China and the U.S. are once again on the rise over&nbsp;President Donald Trump&rsquo;s threats to ban TikTok and WeChat in the U.S. starting on Sunday. With the November election now only about six weeks away, S3 Partners analyst Ihor Dusaniwsky said&nbsp;short sellers are targeting Chinese stocks in a major way.

Dusaniwsky said China and Hong Kong short interest now totals $104 billion, an increase of $2.03 billion in the past month. The dispute between Trump and China over TikTok could be a preview of what&rsquo;s to come between now and the election, and short sellers seem to believe Chinese stocks could suffer.

Most Shorted China Stocks: Here are the five U.S.-listed Chinese stocks with the largest outstanding short positions, according to S3:

<ul>
	<li>Alibaba Group Holding Ltd - ADR (NYSE:<a class="ticker" href="/stock/BABA#NYSE">BABA</a>), $11.72 billion in short interest.</li>
	<li>JD.Com Inc (NASDAQ:<a class="ticker" href="/stock/JD#NASDAQ">JD</a>), $3.24 billion in short interest.</li>
	<li>Pinduoduo Inc - ADR (NASDAQ:<a class="ticker" href="/stock/PDD#NASDAQ">PDD</a>), $2.95 billion in short interest.</li>
	<li>GSX Techedu Inc (NYSE:<a class="ticker" href="/stock/GSX#NYSE">GSX</a>), $2.38 billion in short interest.</li>
	<li>Nio Inc - ADR (NYSE:<a class="ticker" href="/stock/NIO#NYSE">NIO</a>), $1.47 billion in short interest.</li>
</ul>

Short sellers have been particularly aggressive in betting against Alibaba and JD.com in the past 30 days. Alibaba&rsquo;s short interest has increased by $1.48 billion in that time, while JD.com&#39;s short interest is up by $320.7 million. Nio&rsquo;s short interest is headed in the other direction, dropping by $642.5 million in the past month.

Dusaniwsky said Chinese stock short sellers have had some home run trades in 2020 led by Luckin Coffee Inc - ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>), which has netted short sellers a $1.15 billion profit this year. However, short sellers have taken year-to-date losses of $2.51 billion on Alibaba, $2.45 billion on GSX Techedu and $1.77 billion on Nio.

&ldquo;HK-China short sellers are down -$15.98 billion in mark-to-market losses for the year but are up +$935 million in September mark-to-market profits as the Hang Seng retreated -1.79%,&rdquo; Dusaniwsky said.

Benzinga&rsquo;s Take: According <a href="https://www.predictit.org/markets/13/Prez-Election">to PredictIt</a>, Joe Biden now has a 59% chance of defeating Trump in November. Given Trump has been extremely tough on China throughout his first term, any momentum Biden has leading into the election would presumably be bad news for Chinese stock short sellers.

Related Links:

<a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/09/17564090/why-trumps-tiktok-ban-could-be-fort-sumter-moment-in-cold-tech-war-between-us-china">Why Trump&#39;s TikTok Ban Could Be &#39;Fort Sumter Moment&#39; In Cold Tech War Between US, China </a>

<a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/09/17491126/partnership-better-than-acquisition-analysts-react-to-oracle-tiktok-deal">&#39;Partnership Better Than Acquisition&#39;: Analysts React To Oracle-TikTok Deal</a>

Short Sellers Piling Into Chinese Stocks As Trade Tensions Rise

Luckin Coffee Inc (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) is among a group of 45 companies fined $8.98 million for falsification of financial records and misleading the public by China&rsquo;s market regulator, Reuters <a href="https://www.reuters.com/article/us-luckin-coffee-investigation-fine-idUSKCN26D07G?taid=5f69a47cb2fa5d0001db2506&amp;utm_campaign=trueAnthem:+Trending+Content&amp;utm_medium=trueAnthem&amp;utm_source=twitter">reported</a> Monday.

What Happened: The market regulator said its investigations established that the coffee chain violated Chinese laws and misled the public, according to Reuters. The company is alleged to have faked statistics and inflated its operational data between August 2019 to April&nbsp;this year.

Two Luckin entities among a total of 43 companies were also reportedly fined for being hand-in-glove with the Xiamen, China-based coffee drinks retailer.

Luckin said on Weibo it had carried out an &ldquo;overall rectification on the related issues.&rdquo;

&ldquo;We will further improve our operations according to related laws and regulations,&rdquo; it added, as reported by&nbsp;Reuters.

Why It Matters: In July, Luckin <a href="https://www.benzinga.com/news/20/07/16610675/luckin-coffee-confirms-lus-ouster-appoints-new-chairman-directors">ousted</a> its chairman Charles Zhengyao Lu after previous efforts failed.

An internal investigation had revealed that Lu had knowledge of the <a href="https://www.benzinga.com/news/20/06/16422343/luckin-chairman-and-board-members-try-to-oust-each-other-after-giving-up-on-nasdaq-listing">fabricated transactions </a>but failed to disclose them.

The Chinese rival of Starbucks Corporation (NASDAQ:<a class="ticker" href="/stock/SBUX#NASDAQ">SBUX</a>) had <a href="http://investor.luckincoffee.com/node/6886/html">revealed</a> in April that Liu and several employees had fabricated transactions to the tune of $310 to boost the company&rsquo;s sales.

Trading in Luckin shares was suspended the same month on the Nasdaq Stock Market. Short-seller&nbsp;Citron Research, a long-term backer of the coffee chain company, said at the time that the event <a href="https://www.benzinga.com/news/20/09/17596787/luckin-and-others-fined-nearly-9m-for-faking-records-and-misleading-public-by-china-market-regulator">eroded investor trust</a> in the U.S.-listed&nbsp;Chinese companies.&nbsp;

In May, the U.S. Senate passed a bill that seeks to <a href="https://www.benzinga.com/government/20/05/16077893/us-senate-passes-new-regulations-for-chinese-companies-alibaba-others-trade-down?utm_source=cityfalcon&amp;utm_medium=cityfalcon&amp;utm_campaign=cityfalcon&amp;utm_content=Google+Feedfetcher">delist Chinese companies</a>, unless they manage to prove they aren&#39;t owned or controlled by a foreign government.

Price Action: Luckin OTC shares closed 0.39% higher at $2.6 on Monday.

Events

Luckin, Others Fined $9M For Faking Records, Misleading Public In China

Citron Research founder and activist short seller Andrew Left discussed his latest ideas during an appearance on Benzinga&rsquo;s <a href="https://www.youtube.com/watch?v=B3WL3_xjJCU">PreMarket Prep</a> show Tuesday morning.

Left has gained notoriety over the years for successfully betting against Bausch Health Companies Inc (NYSE:<a class="ticker" href="/stock/BHC#NYSE">BHC</a>) (formerly Valeant Pharmaceuticals) and a number of fraudulent Chinese stocks, but has also come out positive on a number of stocks he believes are true winners.&nbsp;

Short Ideas: One of Left&rsquo;s current short positions is COVID-19 vaccine play Inovio Pharmaceuticals Inc (NASDAQ:<a class="ticker" href="/stock/INO#NASDAQ">INO</a>), which Left calls &ldquo;Pinocchio Pharmaceuticals.&rdquo;

&ldquo;They were pretty much told by the FDA they can not start Phase 2, so they&rsquo;re stuck in Phase 1. Now we&rsquo;re 30 years [with] no product,&rdquo; Left said.

&ldquo;I don&rsquo;t know why it&rsquo;s worth anything more than cash...They said they developed a vaccine in three hours...yet it&rsquo;s going to take them a month to answer the FDA about this vaccine. Short-term it should definitely trade at $6 or $7.&rdquo;

Left also recently compared Chinese education stock GSX Techedu Inc (NYSE:<a class="ticker" href="/stock/GSX#NYSE">GSX</a>) to fraud Luckin Coffee Inc - ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>).

&ldquo;If it&rsquo;s not a fraud, they&rsquo;re a better company than Snowflake&nbsp;than Google, than Facebook ever was. They said they&rsquo;re growing at 370% profitably. So it&rsquo;s either the greatest company that ever existed in the history of the world, or it&rsquo;s a fraud,&rdquo; Left said.

Left has called Plug Power Inc (NASDAQ:<a class="ticker" href="/stock/PLUG#NASDAQ">PLUG</a>) the anti-Tesla Inc (NASDAQ:<a class="ticker" href="/stock/TSLA#NASDAQ">TSLA</a>).

&ldquo;Plug Power has been expensive for a while, and it remains expensive. But now people are on the hydrogen [trend], they&rsquo;re just loving on it, so it is what it is....I would not own the stock at all. I don&rsquo;t know about shorting. I&rsquo;m not short the stock right now,&rdquo; Left said.

Left is also skeptical of buying movie theater stocks like AMC Entertainment Holdings Inc (NYSE:<a class="ticker" href="/stock/AMC#NYSE">AMC</a>) and Cinemark Holdings, Inc. (NYSE:<a class="ticker" href="/stock/CNK#NYSE">CNK</a>), but would be cautious shorting.

&ldquo;The problem with the movie theaters is obviously the business model just seems dead, right? But tomorrow if we have a working vaccine do I feel like standing in the way of an 80% move against me?&rdquo; he said.

See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/09/17700426/citrons-andrew-left-supports-spac-trend-but-nikola-didnt-pass-the-smell-test">Citron&#39;s Andrew Left Supports SPAC Trend, But Nikola &#39;Didn&#39;t Pass The Smell Test&#39;</a>

Long Ideas: While Left has gotten plenty of publicity for his activist short selling, he also makes plenty of bullish bets as well. Left recently said he was long Fluidigm Corporation (NASDAQ:<a class="ticker" href="/stock/FLDM#NASDAQ">FLDM</a>).

&ldquo;The only way we&rsquo;re going to get out of what we&rsquo;re in right now is massive testing, and I still don&rsquo;t know why it&rsquo;s tough to get tests. Saliva-based testing seems to be the answer. They have the most advanced proprietary system for mass-scale saliva-based testing,&rdquo; Left said.

Left has predicted Restoration Hardware Holdings (NYSE:<a class="ticker" href="/stock/RH#NYSE">RH</a>) would soon hit the $500 range.

&ldquo;They hit every trend out there--the de-urbanization trend, the stay-at-home trend. They&rsquo;re one of the few companies out there without any real competition. If stores do open up again, they own the best real estate in the country...I don&rsquo;t see what stops them,&rdquo; Left said.

Biggest Mistake: Left is bullish on fitness equipment stock Nautilus, Inc. (NYSE:<a class="ticker" href="/stock/NLS#NYSE">NLS</a>) because he likes the home fitness trend, and said his biggest mistake was underestimating that trend by shorting&nbsp;Peloton Interactive Inc (NASDAQ:<a class="ticker" href="/stock/PTON#NASDAQ">PTON</a>).&nbsp;

&ldquo;My biggest mistake as a short seller is shorting a good product on valuation. I think the valuation on Peloton is stupid, ridiculous, nonsensical,&rdquo; Left said.

He said the valuations of Shopify Inc (NYSE:<a class="ticker" href="/stock/SHOP#NYSE">SHOP</a>) and Tesla are similarly ridiculous, but cautioned that valuation hasn&#39;t mattered recently.

&ldquo;Historically if you want to make money in this market, the past 10 years, if you find a product and you like the product, you buy the stock. You do not worry about the price of the stock.&rdquo;

Watch to the full interview with Andrew Left in the clip below, or listen to the podcast <a href="https://soundcloud.com/bztv/premarket-prep-for-september-29-reactions-to-mondays-rally-citron-researchs-andrew-left#t=1:03:08"> here</a>

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" frameborder="0" height="315" src="https://www.youtube.com/embed/B3WL3_xjJCU?start=3807" width="560"></iframe>

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin.&nbsp;You can watch PreMarket Prep&nbsp;live every day from 8-9 a.m. ET&nbsp;<a href="http://benzinga.com/premarket-prep">Benzinga&#39;s YouTube channel</a>, and the podcast is on <a href="https://open.spotify.com/episode/4Qu3m5WpYlUwTeLvSh2QoG">Spotify</a>,&nbsp;<a href="https://podcasts.apple.com/us/podcast/premarket-prep/id915782694">iTunes</a>,&nbsp;<a href="https://play.google.com/music/listen?u=0#/ps/Id2myc5nfdgd4pry47sjss2n2my">Google Play</a>,&nbsp;<a href="http://soundcloud.com/bztv">Soundcloud</a>,&nbsp;<a href="http://www.stitcher.com/podcast/benzinga-morning-show">Stitcher</a>&nbsp;and <a href="https://tunein.com/podcasts/Business--Economics-Podcasts/PreMarket-Prep-p1122264/">Tunein</a>.

\

Long Ideas

Exclusives

Interview

Citron's Andrew Left Talks Inovio, Fluidigm And His 'Biggest Mistake As A Short Seller'

The following is excerpted from an article that originally appeared on <a href="https://www.capitalwatch.com/details/news/472121585613017088.html">CapitalWatch</a>&nbsp;

Most of us know the story of Luckin Coffee (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>). In a nutshell, the company was supposed to be the &quot;Starbucks of China&quot;&nbsp;giving the American coffee giant a run for its money on the Mainland. The Beijing-based company launched in 2017 and quickly grew its stores and pick-up locations to rival Starbucks Corporation (NASDAQ:<a class="ticker" href="/stock/SBUX#NASDAQ">SBUX</a>) in China. The stock exploded in popularity. And then, it just exploded.

First, reports emerged in January that Luckin had fabricated its financial data, an allegation which the company, of course, denied. Then regulators launched a probe into Luckin in April and found that the company violated Chinese competition laws by inflating its operational data with false statistics to &ldquo;deceive and mislead the public.&rdquo;

Regulators also discovered that Luckin falsely increased its 2019 profit margin and revenue by booking more than 2 billion yuan of sales through fake coupons. From January 17 to May 21, Luckin&rsquo;s stock price plummeted more than 95%. Consequently, Luckin &ldquo;chose&rsquo; to delist and now it trades as a penny stock on the over-the-counter market.

The bitter taste of the Luckin scandal lingered in the mouths of American investors, leading to the series of China-focused legislation designed to protect investors from future accounting malefactions of such magnitude.

But that was then, and this is now.

On Tuesday, the stock rose 12% on news that Luckin, along with 43 fraud-friendly firms that abetted Luckin in the scandal, got hit with a 61 million yuan fine ($8.98 million). That&rsquo;s right, only a little under $9 million spread across all these companies for a fraud that, according to Luckin&rsquo;s own internal investigation, inflated reported revenue by 2.12 billion yuan, or around $309 million. A small price for an epic fraud.

Will Luckin ever become the Starbucks of China? Who knows? But will it trade more than a little over $3 per share like it does now? I think so. Allocate an exceedingly small slice of your portfolio and roll the dice. If you make a profit over 25%, I suggest you turn in your chips; I will.

Cruisin&#39; For A&nbsp;Bruisin&#39; Well Before Profits

I wrote to stay away from cruises on the eve of the Covid-19 outbreak. The date was February 21, and the stock in Carnival Corp. (NYSE:<a class="ticker" href="/stock/CCL#NYSE">CCL</a>) was trading at around $41 per share, having taken a recent hit on account of a coronavirus outbreak on the Carnival-owned Diamond Princess ship docked in Tokyo.

Mark Tepper, president and CEO of Strategic Wealth Partners, said this at the time <a href="https://www.cnbc.com/video/2020/02/12/as-cruise-stocks-recover-one-play-is-groups-best-bet-traders.html">on CNBC&rsquo;s&nbsp;</a><a href="https://www.cnbc.com/video/2020/02/12/as-cruise-stocks-recover-one-play-is-groups-best-bet-traders.html">Trading Nation: </a>&quot;In my opinion, the coronavirus has really created a buyable pullback.&rdquo; Tepper added, &ldquo;Of all these names, my favorite would be Norwegian.&rdquo;

We know what happened after that. Norwegian Cruise Line Holdings Ltd&nbsp;(NYSE:<a class="ticker" href="/stock/NCLH#NYSE">NCLH</a>) and all the big public-traded cruise liners sunk to disastrous levels. Shut out of the stimulus, they capsized.&nbsp;Then, months later after the March selloff, cruise bulls came out again and said to buy. This time, they were right.&nbsp;Shares of Carnival and Norwegian have doubled while shares of Royal Caribbean Cruises Ltd (NYSE:<a class="ticker" href="/stock/RCL#NYSE">RCL</a>)&nbsp;have tripled. And yet, not surprisingly, these stocks are still way down from their highs as their ships sit at port, weighed down by a cargo of debt.

Today, Norwegian trades at around $17 per share, while Carnival trades at around $15. At around $65 per share, Royal Caribbean&nbsp;is still less than half of what it was pre-Covid-19.

Still, why would we look to cruises again when the Centers for Disease Control and Prevention just extended its no-sail order through October? Why buy these stocks when the U.S. president is stricken with the coronavirus?

Well, as for Trump, the market doesn&rsquo;t care.&nbsp;Stimulus is what the economy and the equity markets crave. At this moment, a sudden death of any stimulus bill would cause more havoc than the sudden death of the president, his wife, his staff, and his opponent Joe Biden.

As for the no-sail order, the CDC was rumored to consider canceling sailings until the end of February 2021&mdash;so it could have been worse (of course, they still can). And even if they don&rsquo;t, the cruise industry is still canceling sailings on its own; Carnival has canceled most of its sails through the end of 2020.

So why buy?

Well, Carnival has $8.2 billion in liquidity as of the end of August. As for Royal Caribbean, it successfully renegotiated over $2.2 billion in existing debt and secured a binding loan commitment from Morgan Stanley for a $700 million credit facility. As for Norwegian,&nbsp;it had $2.5 billion of total liquidity as of June 30. True, it has a cash burn rate of $160 million, but all we are talking about here is whether these companies survive long enough for their stock to move up.

In my view, all three of these bacterial breeding grounds will sail again. Over 70% of Americans plan to take summer vacations. This summer, RV sales exploded because road trips were the only game in town. But as Trump once said regarding a cut to Social Security: &quot;Besides, how many times can you take the RV to see the Grand Canyon?&quot;

While there is much debate as to which is the best cruise buy, I say buy them all. Carnival is the biggest but also the messiest; Royal Caribbean is the most well-run but it is also more expensive and shares have increased more from their lows than its peers; Norwegian boasts a newer, smaller, and more manageable fleet and no new ships scheduled to set sail for the next two years.

If I really had to choose which of these beleaguered stocks has the biggest upside for the lowest risk, I would choose Norwegian.

Real Returns Mean Real Risks

The fact is if you missed the Zoom Video Communications (NASDAQ:<a class="ticker" href="/stock/ZM#NASDAQ">ZM</a>) boat, you are not going to see huge returns in most tech. Zoom may not go down back to where it should trade based on a sensible valuation, but it is not going to double to $850 per share in the next 12 months either. But Luckin Coffee, oil l (I like Exxon Mobil (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>), and cruise ships just may.

The question is: Do you feel Luckin?

Opinion

Why I'm Buying Cruise Stocks And Luckin Coffee

The following originally appeared on <a href="https://www.capitalwatch.com/details/news/474628710574723072.html">CapitalWatch</a>

The above is just a working title. I was also thinking &ldquo;Red Fawn: How Hollywood Sold Its Soul to China.&rdquo; Or what about &ldquo;Big Like Xi&rdquo;?&nbsp;Or the equally self-serving: &ldquo;Watch&nbsp;Obamaland&nbsp;Free on Prime as You Buy Amazon Stock.&rdquo; No, this: &ldquo;Buy Roku as Hollywood Sells Out to China.&rdquo;

Titles aside, ultimately the consumer, not the creator, theoretically controls the market. Hollywood makes films people want to see. And people apparently want to see good guys donning capes saving the world from bad guys donning capes.

The tastemakers of the world have lost their taste for good art, at least in theaters. With a small movie screen in nearly every American home, the silver screen has been largely reserved for big comic-book spawned inane blockbusters over the last few years.

But you know what is worse than American audiences determining what movies we see? Chinese audiences filtered through an image-obsessed totalitarian government. As the world&rsquo;s largest movie market as of this year, China has become the world&rsquo;s tastemaker for film. That means you can kiss that long-awaited sequel to&nbsp;Kundun&nbsp;goodbye.&nbsp;Too bad,&nbsp;Kundun: Part Deux&nbsp;has such a good ring to it.

(Regarding the 1997 Scorsese masterpiece, then Disney CEO Michael Eisner later apologized to Beijing. &ldquo;We made a stupid mistake in releasing&nbsp;Kundun,&rdquo; he told Premier Zhu Rongji. &ldquo;&hellip;and in the future we should prevent this sort of thing, which insults our friends, from happening.&rdquo;&nbsp;The Dalai Lama may be a great guy, but Tibetans aren&rsquo;t exactly flush with cash. Remember all those &ldquo;Free Tibet&rdquo; concerts celebrities used to sponsor? I do.)

Even post-Eisner, Walt Disney Co (NYSE:<a class="ticker" href="/stock/DIS#NYSE">DIS</a>)&nbsp;has stayed true to its word, recently offering up a live-action remake of&nbsp;Mulan, complete with thanks in the closing credits to a bureau of public security in Xinjiang, the province where it is believed that over a million Uighurs toil in camps. Despite, or, rather, because of Disney&rsquo;s lack of integrity, I am long on Disney&rsquo;s stock. Between its Disney+, its ownership in Hulu, and its willingness to bow to Beijing, Disney is a buy even as its parks&mdash;and its soul&mdash;remain barren.

Red Rambo And The Sino-Sychophantic Blockbuster

As a child of the 80s, I am no stranger to movies fetishizing American power and so-called exceptionalism.&nbsp;Rambo, Top Gun, Rocky IV&mdash;these flag-flaunting-themed movies were a Reaganian wet dream. However, these were popular because they reflected&mdash;and to some extent helped create&mdash;the zeitgeist of their time.

Reagan may have liked&nbsp;War Games&nbsp;but he didn&rsquo;t write it. Nor did he sit in consequential judgement as to which movies played in theaters and which not. (Interestingly, after screening&nbsp;War Games&nbsp;at Camp David, a nervous President Reagan brought it up with his national security team, eventually leading to anti-hacking laws and a total revamping of cyber-security at the Defense Department).

Now if we can only get Trump to stop re-watching&nbsp;Idiocracy.

But in China, the zeitgeist doesn&rsquo;t have the final say on which movies play&mdash;the government does. And Hollywood has been bending over backwards to serve their new authoritarian tastemakers. The only &ldquo;thumbs-up&rdquo; review that matters now is one that comes from the hand of Secretary Xi.

To wit, Hollywood&rsquo;s shameful placation of the PRC has long been on full display. Mostly, it comes in the form of forced cuts like the removal of the Japanese and Taiwanese flags on Tom Cruise&rsquo;s flight jacket in&nbsp;Top Gun: Maverick&nbsp;or an omitted scene shot in Shanghai for&nbsp;Mission Impossible: III&nbsp;because, get this: Images of clothes hanging from clotheslines painted too poor a picture of the city.

Then, there are movies that are more actively pro-PRC like&nbsp;Transformers: Age of Extinction&nbsp;in which director Michael Bay spares no expense to Beijing&rsquo;s bidding&mdash;the American government is the bad guy, the Communist Chinese government is the good guy. A Reaganian wet dream truly transformed into a Reaganian nightmare.

One of the most popular franchises in China, the&nbsp;Transformers&nbsp;movies, have consistently topped the viewing charts on&nbsp;iQiyi Inc (NASDAQ:<a class="ticker" href="/stock/IQ#NASDAQ">IQ</a>),&nbsp;a video streaming platform known as the &ldquo;Netflix of China.&rdquo; American movies are big hits on the platform, and the company just released its first original film&nbsp;Let Life Be Beautiful.

The stock was in the green this week after releasing another denial of fraud allegations levied at the company courtesy of Wolfpack Research back in April. Citing in-person surveys of more than 1,500 people and Chinese credit reports of iQiyi&rsquo;s VIEs and WFOEs, the short seller claimed that the Chinese entertainment platform overstated its user numbers and inflated its revenues in SEC filings by as much as 261.7% pre-IPO. Further, in 2019, Wolfpack estimated that iQiyi inflated revenue by 27% to 44%. Are they another Luckin Coffee (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>)? Maybe. But like Luckin, iQiyi can be both a liar and long-term winner. The SEC launched a probe into iQiyi and its parent company,&nbsp;Baidu Inc (NASDAQ:<a class="ticker" href="/stock/BIDU#NASDAQ">BIDU</a>).

Now back to beating up on Beijing and more&nbsp;stock picks.

The Hard and Fast Loss of American Soft Power

The consumer may rule the movie market, but the consumer is also influenced by the options he or she&nbsp;is presented. Film has the power to influence, not just reflect, the zeitgeist. Movies and shows like&nbsp;Roots, Dances With Wolves, The Joy Luck Club, Transparent, The Cider House Rules&mdash;to name only a few&mdash;have influenced people&rsquo;s views about a number of social issues and historical events. While America may have shipped nonsense like&nbsp;Baywatch&nbsp;across the seas, it also shipped&nbsp;Brokeback Mountain, the Ang Lee-directed masterpiece that was summarily banned in China.

More than military might, the use of American soft power&mdash;from foreign aid to film&mdash;has been integral to spreading American ideals and influence around the world. Yes, Hollywood has exported jingoistic action-packed garbage to the world, but for every&nbsp;Rambo&nbsp;there&rsquo;s a&nbsp;Platoon.

Blockbuster films have already suffered a critical creative blow due to a combination of home electronics ingenuity and Hollywood laziness. To be beholden to profits is bad enough, but to also be beholden to Beijing is to add a layer of spinelessness to otherwise silly films. Soft power aside, this is just more incentive to make unchallenging films; films that deprive both American and Chinese audiences alike. Ask yourself: Don&rsquo;t Chinese audiences deserve their country&rsquo;s version of&nbsp;All the President&rsquo;s Men?

Far from hyperbole, it&rsquo;s actually worse than you think. A report by PEN, a non-profit organization that campaigns on free speech and sponsors the Pinter Prize for literature, claimed that American movie studios even invited Chinese government regulators to film sets as advisors on how to avoid censorship in China, which may explain why craft services now include pangolin.

&ldquo;Our biggest concern is that Hollywood is increasingly normalizing pre-emptive self-censorship in anticipation of what the Beijing censor is looking for,&rdquo; said the author of the report&cedil; James Tager, as cited in a BBC.com piece.

More than willing to speak truth to political power to Washington D.C., Hollywood&rsquo;s golden PRC-placed handcuffs prevent it from doing likewise to Beijing. China would have no problem playing my politically-minded satirical comedy&nbsp;Obamaland&nbsp;(again, free on Amazon Prime), but would never consider exhibiting a film that pokes fun of China&rsquo;s political culture. (Unlike Barack Obama, Xi already is President-for-Life, which would negate the humor of the premise).

With movie houses outside of China being all but empty until a vaccine,&nbsp;Amazon.com Inc&nbsp;(NASDAQ:<a class="ticker" href="/stock/AMZN#NASDAQ">AMZN</a>)&nbsp;is another buy. And so is&nbsp;Netflix Inc&nbsp;(NASDAQ:<a class="ticker" href="/stock/NFLX#NASDAQ">NFLX</a>).&nbsp;I am aware that Netflix trades at about 10 times forward sales ad has a price-to-earnings ratio (P/E) ratio of 112, but if you plan to hold for a long time, none of that matters; the stock could be worth double in less than five years. Also, unlike the tech companies covered in the streaming platform&rsquo;s stunning documentary&nbsp;The Social Dilemma, as a subscription-based platform Netflix is comparatively insulated from any market worries over a break-up, however unlikely, of big tech monopolies.

AVOD Is a Buy

Not the Turkey-trading A.V.O.D. Kurutulmus Gida for all you Robinhood traders who do not read the articles but skim for symbols. I am talking about Advertising-based Video on Demand (AVOD), which is beginning to bite in to the video streaming services market. The longer Covid-19 lasts and until Hollywood gives the Middle Kingdom the middle finger, AVOD market players like Tubi, PlutoTV, Peacock, and, of course, Roku have begun to chip away at the audiences relegated to Subscription Video on Demand (SVOD) services like Netflix and its peers.

While the data don&rsquo;t suggest Tubi and the like will take over the space, AVOD usage is growing exponentially. To wit, Fox Corp. acquired Tubi back in April when it had around 25 million monthly users. Fast forward to the end of August, it had 10 million more. Around the same time, the streaming Vudu was sold by Walmart (NYSE:<a class="ticker" href="/stock/WMT#NYSE">WMT</a>) to the privately-held movie-ticketing company, Fandango.&nbsp;Fox Corp. (NASDAQ:<a class="ticker" href="/stock/FOXA#NASDAQ">FOXA</a>) is a buy for the patient investor, having not fully recovered from its pre-virus lows.

Avoid&nbsp;AT&amp;T (NYSE:<a class="ticker" href="/stock/T#NYSE">T</a>), owner of WarnerMedia (which owns HBO and DirecTV) for now. While its decision to offload DirecTV will clear debt off its books, the loss signals the company has thrown in the towel on content. In 2014, AT&amp;T spent $67.1 billion in total, including absorbing DirecTV&#39;s net debt load in the acquisition. It hasn&rsquo;t panned out, and the company is now looking to sell the DirecTV for around $15 billion to private equity investors, an embarrassing loss in a booming video streaming marketplace. AT&amp;T-owned HBO Max currently has 36 million subscribers, while rival Disney+ boasts 60 million.

The Show Must Go On... in China

Movie theaters are not dead in America; they are resting. Soon enough, the curtains will go up and there will be plenty of caped superheroes fighting for truth, justice, and the Communist Chinese Way. As for movie theater stocks, British-owned&nbsp;Cineworld Group (OTC:<a class="ticker" href="/stock/CNNWF#OTC">CNNWF</a>)&nbsp;is trading so low after suspending U.S. and U.K. operations it might be worth betting a tiny part of your portfolio on. But beware; this cinema stock is one of the most shorted stocks in the market for a reason. Saddled with debt, there is no guarantee this company will make it.

AMC Entertainment Holdings (NYSE:<a class="ticker" href="/stock/AMC#NYSE">AMC</a>)&nbsp;is a safer bet but is still a mess. AMC is owned, in part, by Chinese multinational Dalian Wanda Group, which also owns Wanda Film Holding Co.&nbsp;Ltd (SSE: 002739), another movie stock I wouldn&rsquo;t jump on quite yet, despite China&rsquo;s coronavirus-free movie theaters beginning to boom.

Texas-based&nbsp;Cinemark Holdings (NYSE:<a class="ticker" href="/stock/CNK#NYSE">CNK</a>),&nbsp;the third-largest movie chain in America is yet another mess. However, trading at under a third of what it was pre-virus, upside here could be bigger than AMC if the movie house survives.

IMAX Is the Movie Stock BUY

While the company has received recent analyst downgrades on furloughs and ugly forecasts,&nbsp;IMAX (NYSE:<a class="ticker" href="/stock/IMAX#NYSE">IMAX</a>)&nbsp;is the kind of company created to thrive in a theater business devoted to spectacle over substance. As good as your flat screen is, it&rsquo;s no IMAX. Also, the company&rsquo;s growing presence in China will help. IMAX grossed $53.2 million at the box office in China since theaters began to reopen in late July. Last week, the company collected a record-breaking $13 million during the first two days of the National Day Golden Week holiday in China with the release of&nbsp;Jiang Ziya: Legend of Deification.&nbsp;Earning $11.5 million,&nbsp;it was the biggest weekend box office for an animated film in China.

If you are not yet sold on the movie or the stock consider this: I think the hero Jiang Ziya wears some sort of cape.

And so these are the new tastemakers of the world, are they? I say we fire the Chinese and the Americans, both. I say give the job to the more sophisitcated British, instead. After Brexit and Covid-19, they will need the work.

Big Trouble In Little Hollywood: Buy Streaming Stocks As China Ruins The Movies

Gourmet beverages might belong to the category of cheapest luxury goods, but these manufacturers suffered this year along with the overall economy. Even leaders such as Starbucks (NASDAQ:<a class="ticker" href="/stock/SBUX#NASDAQ">SBUX</a>) and PepsiCo (NASDAQ:<a class="ticker" href="/stock/PEP#NASDAQ">PEP</a>) saw significant sales declines as soon as lockdowns took place, though their equity has since rebounded for the most part. Starbucks specifically has taken coffee to the next level with 32,000 cafes across the globe. So what did Starbucks do that helped it stay afloat?

<h4>The effect of a global pandemic</h4>

Starbucks revealed COVID-19 made it lose $1.2 billion&nbsp;in sales as an impact of limited operations, reduced hours as well as closures.&nbsp;This year, the US coffee chain saw everything but its typical quarter where sales and comps both score notch high growth numbers as they bottomed out at as low as a 65% decline during the company&#39;s third quarter.

<h4>Competitors</h4>

For now, the coffee giant does not really have a real competitor be threatened by. Dunkin&#39; Brands (NASDAQ:<a class="ticker" href="/stock/DNKN#NASDAQ">DNKN</a>) stores and McDonald&#39;s (NYSE:<a class="ticker" href="/stock/MCD#NYSE">MCD</a>) do both sell coffee. Moreover, McDonalds announced last week it plans to spend approximately $381.6 million in the Chinese coffee market over the next three years via its coffee brand McCaf&eacute;. By 2023, 4,000 McCaf&eacute; outlets should be up and running on the Chinese mainland so coffee wars might intensify in the near future.

Although the controversial Luckin Coffee Inc (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) did shake its ground in China, there isn&#39;t another retail chain anywhere the size of Starbucks that only focuses on beverages. Both Dunkin&#39; and McDonald&#39;s trail behind Starbucks in sales and Luckin is still grappling with a fraud controversy despite its stock surge.

<h4>The right &quot;recipe&quot;</h4>

Since COVID-19 started its relentless march across the globe, Starbucks aggressively defended its top position by opening more drive-thrus, giving salespeople point-of-sale devices for quick transactions, and focusing on suburban store openings. Last week, it announced it is raising wages for its baristas of at least 10% starting December 14th. Starbucks is already known for giving its workers more generous benefits and pay compared to its peers in the restaurant industry.

The secret weapon &ndash; the mobile app

In September, the coffee giant launched a new loyalty program in September that offers an enhanced shopping experience as well as rewards for members. Those same members that account for a large chunk of sales.

It&#39;s been five years since Starbucks rolled out the ability to&nbsp;place orders using its mobile app. Customers are loving this feature as it is as good as it gets to benefit from the customized Starbucks experience. The company rolled out mobile payments&nbsp;already in 2011, letting customers link a Starbucks card to the app to pay for their orders. This ended up being a brilliant strategy that more than paid off during the pandemic which demanded a &lsquo;contactless&#39; service. Moreover, it made Starbucks&#39;s app the most popular mobile payment processor as it&#39;s sometimes even more used than Apple Inc. (NASDAQ:<a class="ticker" href="/stock/AAPL#NASDAQ">AAPL</a>) ApplePay, according to e-Marketer. Starbucks revealed that almost one quarter of total orders in its stores come from the mobile app.

<h4>Results</h4>

Despite the difficult environment, the coffee giant managed to exceed expectations with its last reported quarter largely because of a decision it made years ago. Analysts had expected Starbucks to earn $6.06&nbsp;billion, but despite the pandemic having reduced its customer traffic, revenue for the quarter ended up being $6.2 billion. Adjusted EPS of 51 cents also exceeded Bloomberg&#39;s estimate of 31 cents.

While the pandemic is still raging over many parts of the globe, Starbucks has see a 9% revenue drop in the fourth quarter ended on September 30th. Still, it&#39;s been improving quarter to quarter while topping estimates every time.

Due to the global health and consequent economic crisis, Starbucks has seen its revenues fall 11% YoY to $23.5 billion during FY 2020 that ended in September. But, it managed to beat earnings expectations with EPS of $0.79 while reporting a cash inflow of $1.6 billion from operating activities.

<h4>FY 2021</h4>

Starbucks is forecasting double-digit growth in fiscal 2021 as it aims to regain everything it lost in 2020 while moving forward. Earnings were already positive in the fourth quarter and sales are already positive in its second fastest-growing market- China. Trefis expects Starbucks&#39; revenues to recover after this unprecedented year and rise by 21%, in the range between $28 billion to $29 billion. Its net income is likely to follow the positive trend of recovery as it is estimated at $3.7 billion, with the expected EPS of $3.17.

<h4>Outlook</h4>

Even the business that were able to stay open during the pandemic felt the pain of those that were forced to close their doors. Everyone who survived had to quickly figure out how to make drastic changes to the way they served their customers while protecting their employees from the virus. Remarkably, Starbucks managed to keep going after a very harsh reality check. Five years after it launched its mobile app, it ended up being &lsquo;saved&#39; by this feature. This story only shows that being focused at constantly improving the customer experience never gets old. The lesson is simple: what was good for the customer ended up being very good for the business.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full <a href="https://iamnewswire.com/disclaimer-disclosure/">disclosure</a> . IAM Newswire does not hold any position in the mentioned companies. Press Releases &ndash; If you are looking for full Press release distribution contact: <a href="mailto:press@iamnewswire.com">press@iamnewswire.com</a> Contributors &ndash; IAM Newswire accepts pitches. If you&#39;re interested in becoming an IAM journalist contact: <a href="mailto:contributors@iamnewswire.com">contributors@iamnewswire.com</a>

The post <a href="https://iamnewswire.com/2020/11/23/a-lesson-from-starbucks/" rel="nofollow">A Lesson From Starbucks</a> appeared first on <a href="https://iamnewswire.com" rel="nofollow">IAM Newswire</a>.

A Lesson From Starbucks

'Luckin Coffee Agrees to Pay $180 Million Penalty to Settle Accounting Fraud Charges'

Chinese coffeehouse chain&nbsp;Luckin Coffee Inc &ndash; ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) has agreed to pay a $180 million penalty to settle charges of accounting fraud, the U.S. Securities and Exchange Commission said Wednesday.

What Happened: The Associate Director of the SEC&rsquo;s Division of Enforcement, Carolyn M. Welshhans, remarked that &ldquo;the settlement with Luckin is designed to help ensure that harmed investors have the best available opportunity to receive relief.&rdquo;

The SEC alleged that Luckin&nbsp;intentionally inflated its retail sales by $300 million between April 2019 and January 2020 by creating fake transactions using related parties.

The coffee chain, which at one point was seen as a <a href="https://www.benzinga.com/news/20/01/15065353/starbucks-losing-ground-to-homegrown-luckin-coffee-in-china">major competitor</a> to Starbucks Corporation (NASDAQ:<a class="ticker" href="/stock/SBUX#NASDAQ">SBUX</a>)&nbsp;in China, also&nbsp;&quot;intentionally and materially overstated its reported revenue and expenses and materially understated its net loss in its publicly disclosed financial statements in 2019,&quot; as per the SEC.&nbsp;

Why Does It Matter: Although Luckin&nbsp;has agreed to pay the fine, it has neither accepted nor denied the allegations. The SEC noted&nbsp;that penalty could be partially offset by any payments made to shareholders from the provisional liquidation in the Cayman Islands.

Luckin&nbsp;stock, quoting $26.20 on Apr. 1, fell drastically&nbsp;by 75% the next day after the <a href="https://www.benzinga.com/news/20/04/15727847/luckin-coffee-crashes-after-company-admits-coo-fabricated-transactions">company disclosed</a> its COO had been fabricating transactions for a year.

Price Action: LKNCY closed Wednesday 1.63% higher at $3.74 per share.

Related News:&nbsp;<a href="https://www.benzinga.com/news/20/04/15786108/luckin-coffee-fraud-has-shaken-investor-faith-in-us-listed-chinese-companies-long-term-backer-citron">Luckin Coffee Fraud Has Shaken Investor Faith In US-Listed Chinese Companies, Long-Term Backer Citron Says</a>

Photo by Shwangtianyuan on <a href="https://commons.wikimedia.org/wiki/File:Luckin_Coffee_in_SM_Lifestyle_Mall.jpg">Wikimedia</a>

Small Cap

Luckin Coffee Agrees To Settle Accounting Fraud Charges With SEC For $180M

U.S. President Donald Trump has <a href="https://www.reuters.com/article/us-usa-china-stocks/trump-signs-bill-that-could-kick-chinese-firms-off-u-s-stock-exchanges-idUSKBN28S2ZJ">signed a bill</a> calling for the delisting of foreign companies that don&#39;t adhere to the same accounting transparency standards that securities regulators impose on public U.S. firms.

Why It Matters: The Holding Foreign Companies Accountable Act takes aim at Chinese companies and drew rare strong bipartisan support in the U.S. Congress before arriving on Trump&#39;s desk.

The act says delisting could happen if a given company doesn&#39;t comply with audit inspections three years in a row.

China&#39;s government does not allow the board to perform audit inspections of Chinese companies listed in the US. Audit inspections are performed on other U.S.-listed companies by the Public Company Accounting Oversight Board, set up after accounting scandals such as the one that blew up Enron in the early 2000s.

Chinese companies listed in the U.S. have been embroiled in financial scandals in the past &mdash; including <a href="https://www.benzinga.com/news/20/06/16428261/new-details-emerge-about-luckin-coffee-short-sellers-takedown">Luckin Coffee</a> Inc - ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) this year, which led to a Nasdaq delisting.

Sixteen Chinese companies have delisted since February 2019, according to a government <a href="https://www.uscc.gov/research/chinese-companies-listed-major-us-stock-exchanges">report</a> in October.

Carson Block, who has made himself a short-selling star through his investigations into Chinese companies, has called for the delisting of Chinese firms, saying to <a href="https://www.bloomberg.com/news/articles/2020-11-24/carson-block-s-insane-alpha-disappears-in-bad-year-for-shorts?sref=TBDibEcD">Bloomberg</a> last month: &quot;This is China and the Chinese stock promotion, manipulation fraud machine laughing in the face of the SEC.&quot;

What&#39;s Next: Markets now await any news on specific delistings. The bill could affect <a href="https://www.uscc.gov/research/chinese-companies-listed-major-us-stock-exchanges">217 Chinese companies</a>, including popular stocks such as Alibaba Group Holding Ltd - ADR (NYSE:<a class="ticker" href="/stock/BABA#NYSE">BABA</a>), JD.Com Inc (NASDAQ:<a class="ticker" href="/stock/JD#NASDAQ">JD</a>), Nio Inc - ADR (NYSE:<a class="ticker" href="/stock/NIO#NYSE">NIO</a>), Xpeng Inc - ADR (NYSE:<a class="ticker" href="/stock/XPEV#NYSE">XPEV</a>) and Li Auto Inc. (NASDAQ:<a class="ticker" href="/stock/LI#NASDAQ">LI</a>).

But because of the <a href="https://www.cnbc.com/2020/12/04/alibaba-jdcom-petrochina-likely-staying-on-wall-street-despite-trump-push-to-delist-chinese-companies.html">three-year compliance</a> timeline in the act, delistings may not be imminent.

The author of this article holds shares in Luckin Coffee and an inverse ETF that tracks the downward performance of Chinese companies listed in Hong Kong.

Photo credit: Xpeng Motor Technology Ltd.

Trump Signs Bill That Could Lead To Delisting Of Chinese Stocks Including Nio, Li, Xpeng, Alibaba

The coronavirus outbreak severely disrupted the stock market and the economy in 2020. While many stocks ultimately recovered their early-year losses thanks to aggressive federal stimulus spending, some stocks are still feeling the pandemic pain.

In 2020, U.S. short sellers logged $345 billion in net in mark-to-market losses, <a href="https://www.shortsight.com/2020-short-side-winners-losers/">according to</a> S3 Partners analyst Ihor Dusaniwsky.

&ldquo;The largest losses were in the consumer discretionary and information technology sectors, while there were minimal profits in the energy, real estate, financial and utilities sectors,&rdquo; he said Thursday.

But even though the S&amp;P 500 rallied 16.3% in 2020, short sellers still did well&nbsp;in some of the worst-performing stocks.

Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/21/01/19261270/citrons-andrew-left-says-gamestop-is-pretty-much-in-terminal-decline">Citron&#39;s Andrew Left Says GameStop Is &#39;Pretty Much In Terminal Decline&#39;</a> 

Best Short Trade Of 2020: Dusaniwsky said oil &amp; gas major Exxon Mobil Corporation (NYSE:<a class="ticker" href="/stock/XOM#NYSE">XOM</a>) was the most profitable short in the market in 2020.&nbsp;Exxon short sellers earned more than $1.28 billion in profits in last year thanks to the stock&rsquo;s 40.9% 2020 decline. AT&amp;T Inc. (NYSE:<a class="ticker" href="/stock/T#NYSE">T</a>) was a close second, with short sellers earning a mark-to-market profit of more than $1.26 billion.

Dusaniwsky said Exxon averaged about $2.2 billion in total short interest in 2020. The stock is one of several high-profile energy stocks that treated short sellers very well last year.

Most Profitable Shorts: Here&rsquo;s a look at the 10 most profitable shorts in the market in 2020, sorted by net mark-to-market profits:

<ul>
	<li>Exxon:&nbsp;$1.28 billion</li>
	<li>AT&amp;T:&nbsp;$1.26 billion</li>
	<li>Raytheon:&nbsp;$1.2 billion</li>
	<li>Luckin Coffee Inc - ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>): $1.06 billion</li>
	<li>Wells Fargo &amp; Co (NYSE:<a class="ticker" href="/stock/WFC#NYSE">WFC</a>): $1.03 billion</li>
	<li>Wirecard AG (OTC:<a class="ticker" href="/stock/WRCDF#OTC">WRCDF</a>): $868.7 million</li>
	<li>Chevron Corporation (NYSE:<a class="ticker" href="/stock/CVX#NYSE">CVX</a>): $831.3 million</li>
	<li>McKesson Corporation (NYSE:<a class="ticker" href="/stock/MCK#NYSE">MCK</a>): $814.6 million</li>
	<li>Simon Property Group Inc (NYSE:<a class="ticker" href="/stock/SPG#NYSE">SPG</a>): $711.1 million</li>
	<li>Energy Transfer LP Unit (NYSE:<a class="ticker" href="/stock/ET#NYSE">ET</a>): $693.8 million</li>
</ul>

Benzinga&rsquo;s Take: The most profitable shorts are not necessarily the stocks that dropped the most in 2020, but rather stocks that have dropped significantly and also have large amounts of short interest. Percentage-wise, the best short trade of the year among these 10 stocks was Luckin, which saw its share price drop from $39.36 on Dec. 31, 2019, to $8.50 on Dec. 31, 2020.

Photo by&nbsp;<a href="https://commons.wikimedia.org/wiki/File:Exxon_Mobil_oil_refinery_-_Baton_Rouge,_Louisiana.jpg">WClarke via Wikimedia</a>.&nbsp;

10 Stocks That Earned Short Sellers The Most Profits In 2020

The Joint Provisional Liquidators (the "JPLs") of Luckin Coffee Inc. (the "Company") (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>), Alexander Lawson of Alvarez & Marsal Cayman Islands Limited and Wing Sze Tiffany Wong of Alvarez & Marsal Asia Limited, today filed a verified petition under chapter 15 of title 11 of the United States Code (the "Chapter 15 Petition") with the United States Bankruptcy Court for the Southern District of New York (the "U.S. Bankruptcy Court"). The Chapter 15 Petition seeks, among other things, recognition in the United States of the Company's provisional liquidation pending before the Grand Court of the Cayman Islands (the "Cayman Court"), Financial Services Division, Cause No. 157 of 2020 (ASCJ) (the "Cayman Proceeding")1 and related relief.

The Company is negotiating with its stakeholders regarding the restructuring of the Company's financial obligations, to strengthen the Company's balance sheet and enable it to emerge from the Cayman Proceeding as a going concern, for the benefit of all stakeholders. The relief sought in the Chapter 15 Petition is an important component of the Company's restructuring. This relief will promote centralized administration of the Company's assets by permitting coordination between the Cayman Court and the U.S. Bankruptcy Court, to protect the interests of stakeholders while facilitating the Company's restructuring.

All Company stores remain open for business, offering products with high quality, affordability and convenience to its customers in China. The filing of the Chapter 15 Petition is not expected to materially impact the Company's day-to-day operations. The Company continues to meet its trade obligations in the ordinary course of business, including paying suppliers, vendors and employees.

Luckin Coffee Filed for Bankruptcy

Luckin Coffee Inc &ndash; ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>), which trades as an over-the-counter stock, is plunging hard Friday following an announcement from the company regarding a Chapter 15 bankruptcy filing.

What Happened: Luckin said&nbsp;that a verified petition under Chapter 15 of title 11 of the U.S. code has been filed on its behalf with the U.S. Bankruptcy Court for the Southern District of New York.

The petition, the company said, seeks, among other things, recognition in the U.S. of its provisional liquidation pending before a Cayman Islands court&nbsp;and related relief.

Following the&nbsp;<a href="https://www.benzinga.com/news/20/04/15727847/luckin-coffee-crashes-after-company-admits-coo-fabricated-transactions">unearthing of financial improprieties </a> in April 2020, the company came under regulatory scrutiny and its shares were subsequently delisted from Nasdaq.

What Is Chapter 15 Bankruptcy?&nbsp;Chapter 15, a newer chapter added to the Bankruptcy Code in 2005, is the domestic adoption of Model Law on cross-border insolvency framed by the U.N. Commission on International Trade Law.

It serves to promote cooperation between the U.S. courts and parties of interest and the courts and other competent authorities of foreign countries involved in cross-border insolvency cases. Additionally, it affords protection and maximization of the value of the debtor&#39;s assets, and facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment.

Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/04/15748836/luckin-coffee-short-sellers-make-1-1b-in-profits-as-shares-continue-plummet"> Luckin Coffee Short Sellers Make $1.1B In Profits As Shares Continue Plummet </a>

What&#39;s Next For Luckin: <a href="https://www.benzinga.com/markets/penny-stocks/20/10/17767518/why-im-buying-cruise-stocks-and-luckin-coffee"> Luckin </a> said it is negotiating with its stakeholders regarding the restructuring of its financial obligations&nbsp;to strengthen its balance sheet and enable it to emerge from the Cayman Proceeding as a going concern for the benefit of all stakeholders.

The Cayman proceedings commenced in July 2020.

The relief sought in the Chapter 15 Petition, the company said, will promote centralized administration of the its assets by permitting coordination between the Cayman Court and the U.S. Bankruptcy Court, to protect the interests of stakeholders while facilitating its restructuring.

Luckin said all company stores will remain open for business to its customers in China, and that the Chapter 15 filing is unlikelyto&nbsp; impact its day-to-day operations.

&quot;The company continues to meet its trade obligations in the ordinary course of business, including paying suppliers, vendors and employees,&quot; according to Luckin.&nbsp;

LKNCY Price Action: At last check, Luckin shares were sliding 36.97% to $8.08.

Related Link: <a href="https://www.benzinga.com/news/20/06/16189834/whats-behind-the-luckin-coffee-rally"> What&#39;s Behind The Luckin Coffee Rally? </a>

Restaurants

Beleaguered Chinese Coffee Retailer Luckin Files For Chapter 15 Bankruptcy: What You Need to Know

Luckin Coffee shares are trading lower after the company filed for bankruptcy.

EHang Holdings Ltd &ndash; ADR (NASDAQ:<a class="ticker" href="/stock/EH#NASDAQ">EH</a>) shares were&nbsp;rallying hard Wednesday on above-average volume.

EHang&#39;s Plunge, Rebound: Shares of Chinese autonomous aerial vehicle manufacturer EHang were&nbsp;rising about 45% on more than 10 times their average volume.

The rally comes after a <a href="https://www.benzinga.com/news/21/02/19698825/72-biggest-movers-from-yesterday">steep plunge </a> on Tuesday, when the stock lost about 63%, also on above-average volume. Tuesday&#39;s pullback came in the wake of a <a href="https://wolfpackresearch.com/research/ehang/"> short seller report&nbsp;</a>alleging the stock has been a beneficiary of elaborate stock promotion&nbsp;built on largely fabricated revenues from&nbsp;sham sales contracts with a customer.

Wolfpack Research said in a short report hat &quot;this said customer&quot;&nbsp;appears to be more interested in helping inflate the value of its investment in the company&nbsp;than actually buying its products.

Related Link: <a href="https://www.benzinga.com/news/small-cap/21/02/19468910/jim-cramer-advises-viewers-on-consolidated-edison-ehang-and-more">Jim Cramer Advises Viewers On Consolidated Edison, Ehang And More </a>

EHang Hits Back: In a response to the short report, EHang said it strongly believes that the report contains numerous errors, unsubstantiated statements&nbsp;and misinterpretation of information.

The company also suggested it would take any necessary and appropriate course of action to protect the interest of its shareholders.

It also reiterated its commitment to maintaining the highest standards of corporate governance, as well as transparent and timely disclosure in compliance with the applicable rules and regulations of the SEC and the Nasdaq.

The company also <a href="https://www.ehang.com/news/736.html">posted </a> comments and responses from&nbsp;Huazhi Hu, its founder, on its website in a Q&amp;A format.

Benzinga&#39;s Take: The volatility in EHang shares gives a sense of d&eacute;j&agrave; vu, given the&nbsp;<a href="https://www.benzinga.com/news/21/02/19512620/beleaguered-chinese-coffee-retailer-luckin-files-for-chapter-15-bankruptcy-what-you-need-to-know">unearthing of accounting and financial irregularities </a> at Chinese companies such as Luckin Coffee Inc &ndash; ADR (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) and TAL Education Group (NYSE:<a class="ticker" href="/stock/TAL#NYSE">TAL</a>) in the recent past.&nbsp;

Guangzhou, China-based EHang develops electric, passenger-grade aerial vehicles.

EH Price Action: At last check, EHang shares were rising 50.02% to $69.46.&nbsp;The stock hit an all-time high of&nbsp;$129.80 on Friday.&nbsp;

Tech

EHang Rallies As Chinese Robo Air Taxi Developer Responds To Short Seller

The shares of beleaguered coffee-chain company Luckin Coffee Inc. (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>), traded over the counter, saw a sharp spike on Tuesday, closing 49.3% higher at $8.72.

What Happened: The surge came as Luckin announced entering into a restructuring support agreement with key lenders holding the 0.75% convertible senior notes due 2025 &mdash; representing about 60% of its convertible debt amounting to $460 million.

Luckin said the restructuring of the debt is expected to allow it &ldquo;to comprehensively address its capital structure and better position it for long-term success.&rdquo;

As part of the restructuring agreement, the bondholders can cash in $320 for every $1,000 in principal amount and accrued and unpaid interest.

They could also get $230 in one-year senior secured notes paying 9%&nbsp; interest, or $300 in five-year senior secured notes paying 9%, and $60 in American Depositary Shares of Luckin.

Jinyi Guo, the CEO of the coffee-chain company, dubbed the agreement with noteholders an &ldquo;important milestone for Luckin Coffee.&quot;

&ldquo;The Board of Directors and management team believe that the Restructuring is in the best interests of the Company and its stakeholders. We will continue to take action to strengthen our capital structure while delivering outstanding products and services for our customers,&quot; Guo said.

Why It Matters: Luckin was once pitted as one of Starbucks Corporation&rsquo;s (NASDAQ:<a class="ticker" href="/stock/SBUX#NASDAQ">SBUX</a>) biggest competitors in China.

That was until April last year when the company&rsquo;s chief operating officer <a href="https://www.benzinga.com/news/20/04/15727847/luckin-coffee-crashes-after-company-admits-coo-fabricated-transactions" style="text-decoration-line:none">admitted to fabricating</a> transactions and inflating sale numbers.

Luckin chairman and board members were <a href="https://www.benzinga.com/news/20/06/16422343/luckin-chairman-and-board-members-try-to-oust-each-other-after-giving-up-on-nasdaq-listing" style="text-decoration-line:none">engaged in a tussle</a> to oust each other amid the company&#39;s stock getting delisted from the Nasdaq.

The Xiamen-based company filed for a Chapter 15 bankruptcy filing in February.

The Luckin Resurgence: Why Beleaguered Coffee Chain's Shares Spiked 49% Today

Luckin Coffee Inc. (OTC:<a class="ticker" href="/stock/LKNCY#OTC">LKNCY</a>) shares, which are traded over the counter following the&nbsp;<a href="https://www.benzinga.com/news/20/04/15727847/luckin-coffee-crashes-after-company-admits-coo-fabricated-transactions">financial improprieties </a> that forced a bankruptcy filing, saw some upward bounce Thursday before pulling back.&nbsp;

What Happened: Luckin said it has entered into an investment agreement with Centurium Capital and Joy Capital, two Chinese private equity investment firms, that could potentially fetch the coffee retailer up to $400 million in financing.&nbsp;

Centurium, which is serving as the lead investor, has agreed to invest about $240 million in senior convertible preferred shares of Luckin through a private placement.

Joy Capital will invest about $10 million in senior preferred shares.

Both Centurium and Joy Capital, under certain circumstances, may upsize the investment on a pro rata basis for an additional $150 million, Luckin said.

The closing of the transactions is contingent on a series of closing conditions, including a restructuring of $460 million of the company&#39;s debt.

<a href="https://www.benzinga.com/markets/penny-stocks/20/10/17767518/why-im-buying-cruise-stocks-and-luckin-coffee">Luckin </a> said it plans to use the proceeds of the investment for the proposed offshore restructuring and fulfillment of its obligations under its recently announced settlement with the SEC.

The transactions will allow the company to focus on its balance sheet, continued execution of its business plan, growing of the core coffee business and achieving its long-term growth targets, according to Luckin.&nbsp;

Related Link: <a href="https://www.benzinga.com/news/20/06/16314014/luckins-independent-board-member-quits-barely-3-months-into-the-job">Luckin&#39;s Independent Board Member Quits Barely 3 Months Into The Job </a>

Luckin Names New Independent Auditor: Separately, Luckin said it has appointed Centurion ZD, an independent accounting firm registered with the Public Company Accounting Oversight Board, as its auditor&nbsp;effective Thursday.&nbsp;

Luckin&#39;s previous auditor MarcumBP believes it has not gathered sufficient independent third-party data or conducted sufficient audit procedures to complete the audit in light of certain areas identified in the company&#39;s IT general controls during the year ended December 2019, according to the coffee company.

To address the historical control issues, Luckin said it has enacted remediation enhancements to its controls environment and will continue that process.&nbsp;

Luckin said it intends to work expeditiously with CZD to file its annual reports for the periods ended December 2019 and December&nbsp;2020 as soon as possible.

LKNCY Price Action: At last check, Luckin shares were down 6.7% at $8.91.&nbsp;

Related Link: <a href="https://www.benzinga.com/news/21/02/19512620/beleaguered-chinese-coffee-retailer-luckin-files-for-chapter-15-bankruptcy-what-you-need-to-know">Beleaguered Chinese Coffee Retailer Luckin Files For Chapter 15 Bankruptcy: What You Need to Know </a>

Beleaguered Chinese Coffee Retailer Luckin Announces Private Equity Investment Of Up To $400M

The so-called &quot;reopening boom&quot; is benefiting Starbucks (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SBUX#NASDAQ">SBUX</a>) along with others from the consumer niche that were hit hard during strict social-distancing limitations over the past year. The company&#39;s coffeehouse business is already nearly fully recovered from COVID-19 as it grew internationally with over 100% sales spike in China l while its home U.S. market grew 9% in the most recent quarter, which altogether that helped fuel profitability growth back to double digits.

Starbucks is seeing enthusiastic demand for premium products, including cold brews, refresher drinks, and breakfast sandwiches, along with booming digital sales.

<h4>No More Masks For Fully Vaccinated Customers</h4>

Along with Starbucks, Chipotle Mexican Grill (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CMG#NYSE">CMG</a>), CVS Health Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVS#NYSE">CVS</a>), Target Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TGT#NYSE">TGT</a>), Walmart (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>) and Costco (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COST#NASDAQ">COST</a>) will no longer require to impose mask-wearing inside their stores to fully vaccinated customers. The policy changes come after the Centers for Disease Control and Prevention updated its guidance on mask-wearing on May 13th, specifying that fully vaccinated people don&#39;t need to wear face masks indoors. Although there will be many instances where law will require even those who received the second vaccine dose two or more weeks ago to wear masks, ordering or enjoying your favorite coffee beverage at Starbucks won&#39;t be one of those instances.

<h4>Mixed Latest Earnings Report</h4>

Fiscal second-quarter net income amounted to $659.4 million, or 56 cents per share, pretty much doubling from $328.4 million, or 28 cents per share from the same quarter last year. Excluding items, quarterly earnings amounted to 62 cents per share, beating Wall Street estimates by 9 cents a share, despite revenue falling short of expectations due to weak international sales. Net sales rose 11% as they amounted to $6.7 billion, coming below expectations of $6.8 billion. U.S. sales have recovered to pre-pandemic levels as they rose 9% whereas global same-store sales grew by 15% as the company lapped a decline of 10% from the year-ago period.

At the same time last year,&nbsp;same-store sales at home fell 3% as lockdowns took place across the US. But this quarter, customers bought larger and more expensive coffees while also adding food to their orders, fueling the average up 21%. Traffic, however, is still down by 10%. Interestingly, same-store sales rose 35% outside the U.S despite many European countries extending lockdowns.

<h4>International Growth Is Key</h4>

Starbucks&#39; second-largest market, China, saw same-store sales surge 91% compared to last year&#39;s quarter when they plummeted 50%. The business in China added nearly $500 million to the sales table which translated to a 124% spike in revenue. However, most of that spike is due to the comparison with last year, which included maximum shutdown pressures in the face of the pandemic.

&nbsp;In its battle to bounce back from the effects of the coronavirus pandemic, it appears that Starbucks is now prioritizing international markets for growth the international segment now has 1,044 more stores compared to the same quarter last year.

<h4>Outlook</h4>

For the fiscal year 2021, Starbucks plans to open a net of 1,100 new locations. It will emphasize international growth by opening 1,050 of the 1,100 internationally with approximately 600 of that total will be in China which isn&#39;t good news for Luckin Coffee Inc (OTC:<a class="ticker" href="https://www.benzinga.com/stock/LKNCY#OTC">LKNCY</a>). Its international stores operate at a better profit margin at the store level, 55.2% versus 48.4% domestically. But Starbucks started this shift long before COVID-19 started its relentless march across the globe or more precisely, several years ago as it anticipated reaching saturation in the U.S. market.

As management believes customer traffic will soar as people prioritize reconnecting in person after social distancing for over a year, the full-year outlook for revenue has been raised from the prior range of $28 billion to $29 billion to a range between $28.5 billion to $29.3 billion. Fiscal 2021 also includes a 53rd week, which is expected to add $500 million in revenue.

<h4>Starbucks Is Poised For Growth</h4>

Back in April, CEO Kevin Johnson said the company has been positioned for the inevitable great human reconnection that we see unfolding in the U.S. and every market around the world, and sharply improving operating trends confirm this optimistic outlook. The cash flow trend perhaps illustrates best how much stronger Starbucks has gotten compared to a year ago when COVID-19 strangled its business. As opposed to $474 million boost in the year-ago period, over the last six months, Starbucks generated $2.7 billion of operating cash. This figure implies management has plenty of resources to fund its ambitious plans for 2021 and beyond that rely on drive-through, digital ordering, and new drink and food platform launches. The coffee chain also plans to invest $1.9 billion into store remodels this year.

While the effects of the coronavirus pandemic were not devastating for&nbsp;Starbucks, they were definitely a headwind. Many of its popular coffee shops were closed at least temporarily for in-person seating, eliminating a lucrative source of revenue. Last year, the combined effects of the pandemic slashed operating profits by more than half YoY. But, Starbucks continued its store growth internationally as it opened five net new cafes during the quarter.

Although COVID-19 has not finished disrupting the lives of people worldwide, at least we are slowly getting some sense of normalcy we all longed for. Vaccination progress is key to predicting recovery and Starbucks is using its AI technology to predict the impact of vaccination rates on international sales growth. All in all, it seems that caffeine has kicked in and the coffee giant is now out of the woods.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full <a href="https://iamnewswire.com/disclaimer-disclosure/">disclosure</a>. IAM Newswire does not hold any position in the mentioned companies. Press Releases &ndash; If you are looking for full Press release distribution contact: <a href="mailto:press@iamnewswire.com">press@iamnewswire.com</a> Contributors &ndash; IAM Newswire accepts pitches. If you&#39;re interested in becoming an IAM journalist contact: <a href="mailto:contributors@iamnewswire.com">contributors@iamnewswire.com</a>

The post <a href="https://iamnewswire.com/starbucks-is-back/" rel="nofollow">Starbucks Is Back</a> appeared first on <a href="https://iamnewswire.com" rel="nofollow">IAM Newswire</a>.

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Starbucks Is Back!

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<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>

A slightly disappointing jobs report didn&rsquo;t stop stocks from rallying to new highs on Friday. Now, let&rsquo;s look at a few top stock trades for next week.
<h3>Top Stock Trades for Monday No. 1: Ford (F)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/f-1.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/f-1-300x206.png" alt="top stock trades for F" width="300" height="206" /> Click to Enlarge</a><div>Source: Chart courtesy of <a href="https://trendspider.com">TrendSpider</a></div></div>
	
Ford (NYSE:<a href="https://investorplace.com/stock-quotes/f-stock-quote/">F</a>) is moving slightly higher after earnings, but it&rsquo;s had a choppy few weeks now.
The weekly ranges have tightened, giving us a series of levels to work against.
On the downside, we need to see the $10.45 area hold. A move below that will put the 10-week moving average in play, followed by the $9.40 to $9.50 area. There it will find the Q1 2020 high along with the 200-week moving average.
On the upside, though, look for a move over the $11.50 zone, followed by this week&rsquo;s high at $11.90. On a weekly-up move, look for the 52-week high to be tested at $12.15, then the 161.8% extension near $12.80.

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				</ul>That&rsquo;s a lot of numbers and prices. The bottom line: watch how Ford handles key levels. As they break (on either the upside or the downside), just turn your attention to the next.

<h3>Top Stock Trades for Monday No. 2: Clorox (CLX)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/clx.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/clx-300x190.png" alt="top stock trades for CLX" width="300" height="190" /> Click to Enlarge</a><div>Source: Chart courtesy of <a href="https://trendspider.com">TrendSpider</a></div></div>
	
Clorox (NYSE:<a href="https://investorplace.com/stock-quotes/clx-stock-quote/">CLX</a>) has been so strange lately. I was ready <a href="https://twitter.com/BretKenwell/status/1353718218557435904" target="_blank">when the stock gave use a monthly-up rotation</a> on Jan. 25.
However, I was not expecting it to rally almost 11% at its session high, nor climb 17.6% in six trading sessions. That&rsquo;s not what we expect out of a company like Clorox.
Now the stock has cascaded down from those highs and the post-earnings reaction isn&rsquo;t giving it a lift either. We need to see it hold the $193 area, which it&rsquo;s failing to do at the moment.
What now? Simple. Wait for CLX stock to reclaim $193. With any luck, it will do so soon and we&rsquo;ll have a shallow downside level to measure against. A close below $190 and perhaps CLX stock will need to decline further before firming.

<h3>Top Stock Trades for Monday No. 3: Regeneron (REGN)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/regn.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/regn-300x190.png" alt="top stock trades for REGN" width="300" height="190" /> Click to Enlarge</a><div>Source: Chart courtesy of <a href="https://trendspider.com">TrendSpider</a></div></div>
	
Regeneron (NASDAQ:<a href="https://investorplace.com/stock-quotes/regn-stock-quote/">REGN</a>) has been all over the place too. After a false breakdown in December below $471.50, share ripped higher. The stock climbed in 11 of 12 sessions, eclipsing $550 in the process.
However, the stock then fell in six of the next seven sessions, breaking below $500. It&rsquo;s been a mess.
Regeneron reported earnings this morning, popping higher in the process. But shares were rejected by several key moving averages while failing to hold the 50-day moving average in the process.
If REGN stock can take out its post-earnings high near $515, then a move back to the $535 to $540 area is possible. There it finds the 100-day moving average and downtrend resistance. Above puts the recent high in play at $558.91.

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				</ul>On the downside, however, a break of this week&rsquo;s low near $490 puts the $471.50 area back on watch.

<h3>Top Stock Trades for Monday No. 4: Luckin Coffee (LKNCY)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/lkncy.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/lkncy-300x206.png" alt="top stock trades for LKNCY" width="300" height="206" /> Click to Enlarge</a><div>Source: Chart courtesy of <a href="https://trendspider.com">TrendSpider</a></div></div>
	
This one still trades? You bet! But Luckin Coffee (OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>) hasn&rsquo;t been the same since its fraud charges last year.
Rather than trading this one, I wanted to highlight Luckin as a learning opportunity. It&rsquo;s a lesson to avoid the names that don&rsquo;t have any business being traded.
Sure, the stock went from $5 in December and hit $15 last month. But once it&rsquo;s trading over-the-counter, all bets are off for most traders , be it for liquidity, quality, etc. This name has been in the garbage can for almost a year now and Friday&rsquo;s 46% haircut underscores why, as Luckin <a href="https://www.bloomberg.com/news/articles/2021-02-05/luckin-coffee-files-for-chapter-15-bankruptcy-in-new-york-kks1k2hv" target="_blank">files for Chapter 15 bankruptcy</a>.
There are hundreds of quality stocks to trade at any given time. Pick from one of the higher-quality ones. Remember, as traders, risk is always our top concern. And don&rsquo;t let FOMO creep up on you, as there&rsquo;s always another trade!
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Bret Kenwell is the manager and author of <a href="http://www.futurebluechips.com">Future Blue Chips</a> and is on Twitter <a href="https://twitter.com/BretKenwell">@BretKenwell</a>.
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The post <a href="https://investorplace.com/2021/02/4-top-stock-trades-for-monday-f-clx-regn-lkncy/">4 Top Stock Trades for Monday: F, CLX, REGN, LKNCY</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

4 Top Stock Trades for Monday: F, CLX, REGN, LKNCY

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>

Luckin Coffee&nbsp;(OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>) filed for <a href="https://www.sec.gov/Archives/edgar/data/1767582/000110465921012495/a21-5495_1ex99d1.htm" target="_blank">Chapter 15 bankruptcy protection</a> on Feb. 5 with the United States Bankruptcy Court for the Southern District of New York. Chapter 15 was added to the U.S. Bankruptcy Code in 2005 to provide cooperation between U.S. courts and foreign courts in <a href="https://www.investopedia.com/terms/c/chapter-15.asp#:~:text=Chapter%2015%20is%20a%20section,touch%20upon%20U.S.%20financial%20interests." target="_blank">cross-border insolvencies</a>. Luckin stock dropped 45% on the news.
	<div><img src="https://investorplace.com/wp-content/uploads/2020/07/luckin_lkncy1600_f-300x169.jpg" alt="Luckin (LKNCY) logo on the wall of a coffee shop with a customer sitting at a table below it." width="300" height="169" /><div>Source: abolukbas / Shutterstock.com</div></div>
	
It&rsquo;s very possible that LKNCY could go to zero.
The last time I wrote about Luckin was just after Christmas. At the time, I was in awe of speculative investors who bet on the stock despite plenty of evidence that it and the coffee business were both on their last legs.
&ldquo;By now, you&rsquo;ve probably <a href="https://investorplace.com/2020/12/when-it-comes-to-luckin-stock-the-speculators-won-big/">heard the news</a> that Luckin Coffee&nbsp;settled with the Securities and Exchange Commission. Paying a <a href="https://www.sec.gov/news/press-release/2020-319">$180 million fine</a>, Luckin stock promptly doubled on the news,&rdquo; I wrote on Dec. 27, 2020.
&ldquo;While I wouldn&rsquo;t have bet on the fraudulent coffee chain after it was delisted from the New York Stock Exchange, I do believe speculators deserve a little credit for taking a chance on a positive settlement.&rdquo;&nbsp;
<h3>Populist Wave Lifted Luckin Stock</h3>
Since my article, Luckin stock had gained another 78%, closing Feb. 4 trading just below $13. The <a href="https://www.reddit.com/r/wallstreetbets/comments/kg9oe4/lkncy_to_the_moon_new_financial_info_on_investor/" target="_blank">populist uprising pushed Luckin&rsquo;s valuation</a> to $3.2 billion despite the fact it was going on 14 months without an audited 2019 financial statement.&nbsp;
I understood the price jump after the settlement with the Chinese government. However, for investors to put so much faith in the <a href="https://finance.yahoo.com/news/luckin-coffee-restructuring-efforts-move-084300305.html" target="_blank">unaudited statements provided by Alvarez and Marsal</a> in its December report as Joint Provisional Liquidators seemed to be a bit of an overreach.
The Chapter 15 filing suggests that when the full story is written, it won&rsquo;t be good for shareholders. What I do know is that Starbucks (NASDAQ:<a href="https://investorplace.com/stock-quotes/sbux-stock-quote/">SBUX</a>) will ultimately be the main beneficiary of Luckin&rsquo;s imminent downfall.
Given the latest piece of news, I wonder who precisely is betting on Luckin stock, and more importantly, why are they doing so?
<h3>All Bets Are Off</h3>
It&rsquo;s hard to tell who was betting on Luckin stock.&nbsp;
All of the major institutional investors that held shares earlier in 2020 have all moved on. Melvin Capital Management, the people who got buried by a GameStop (NYSE:<a href="https://investorplace.com/stock-quotes/gme-stock-quote/">GME</a>) short &mdash; the hedge fund needed a <a href="https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html">$3 billion infusion</a> of capital &mdash; owned <a href="https://www.sec.gov/Archives/edgar/data/1628110/000090571820000321/luckin_13gmar242020.htm">40 million Class A ordinary shares</a> (5.2% of Luckin stock) in March 2020. <a href="https://www.sec.gov/Archives/edgar/data/1628110/000090571820000859/xslForm13F_X01/infotable.xml">It held none</a> by the end of June 2020.

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				</ul>Outside of Luckin insiders? I don&rsquo;t have a clue. Maybe it&rsquo;s <a href="https://robinhood.com/collections/100-most-popular" target="_blank">all Robinhood investors</a>.
My InvestorPlace colleague Josh Enomoto recently said that he believes <a href="https://investorplace.com/2021/01/3-sad-reasons-why-luckin-stock-will-move-higher/">Luckin will trade between $10 and $20</a> due to a new generational paradigm. The latest news puts this theory in doubt.

&ldquo;[W]e&rsquo;re living in a new generational paradigm. You&rsquo;d hope that some of the values and principles from prior generations would have been carried forward by younger demographics. But the evidence suggests otherwise,&rdquo; Enomoto wrote on Jan. 21.
&ldquo;For instance, according to the Federal Trade Commission, millennials are <a href="https://www.ftc.gov/news-events/blogs/data-spotlight/2019/10/not-what-you-think-millennials-fraud">&ldquo;25% more likely to report losing money</a> to fraud than people 40 and over generally, and much more likely to report a loss on certain types of fraud.&rdquo;
Essentially, Josh argued that because nobody cares about the fraud that&rsquo;s been committed against investors combined with a negative-interest-rate environment, the floodgates would open as investors put their excess capital to work.&nbsp;&nbsp;
In Josh&rsquo;s defense, his argument was before Luckin filed Chapter 15. There&rsquo;s no way he could have seen this coming. I certainly didn&rsquo;t despite the fact I thought its business was on its last legs.
<a href="https://www.barrons.com/articles/luckin-coffee-stock-was-halted-51586540408?mod=article_inline" target="_blank">After the Chapter 15 filing</a>, I wouldn&rsquo;t be putting my money anywhere near Luckin, but clearly, plenty of people will, hoping to secure a second speculative victory in less than a year.&nbsp;&nbsp;
<h3>Clouds in The Coffee</h3>
The first of two reports by Alvarez and Marsal laid out the company&rsquo;s position as of Sept. 30, 2020. InvestorPlace contributor Vince Martin covered <a href="https://investorplace.com/2021/01/luckins-business-solid-luckin-stock-no-go/">some of the report&rsquo;s findings</a>.&nbsp;
On the top line, the company estimates that net revenues in 2020 will be at least RMB 3.8 billion ($587.2 million), possibly as high as RMB 4.2 billion ($649.0 million). On the bottom line, it expects to lose between <a href="https://dm.epiq11.com/case/luckin/documents">RMB 1.4 billion </a>($216.3 million) and RMB 1.7 billion ($262.7 million) on earnings before interest, taxes, depreciation and amortization (EBITDA) basis.&nbsp;
At the store level, 60% of the 3,898 <a href="https://finance.yahoo.com/news/luckin-coffee-files-chapter-15-091150472.html" target="_blank">self-operated stores were profitable</a> in November 2020; Alvarez and Marsal expect that Luckin&rsquo;s store-level profitability will continue to improve.&nbsp;&nbsp;
Further, it has 894 stores that are operated by others in partnership with the company. That will help reduce its cash burn. That said, Luckin is not expected to reach a cash flow break-even until the first half of 2023, nearly 30 months from now.

That&rsquo;s a long time for any company. For Luckin, with its <a href="https://www.fool.com/investing/2021/02/04/luckin-coffees-business-is-recovering-but-continue/">internal fighting</a>, that&rsquo;s an eternity. However, Alvarez &amp; Marsal&rsquo;s second report pointed out that Luckin had $775 million in cash at the end of December. This compares with $467 million in convertible bonds outstanding.&nbsp;
The Chapter 15 filing suggests it&rsquo;s business as usual.
&ldquo;All Company stores remain open for business, offering products with high quality, affordability and convenience to its customers in China. The filing of the Chapter 15 Petition is not expected to materially impact the Company&rsquo;s day-to-day operations. The Company continues to meet its trade obligations in the ordinary course of business, including paying suppliers, vendors and employees,&rdquo; <a href="https://finance.yahoo.com/news/luckin-coffee-restructuring-efforts-move-084300305.html" target="_blank">Luckin&rsquo;s Feb. 5 press release stated</a>.
So, as Vince suggested, it&rsquo;s possible that in 2025, the fraud will be in the rearview mirror, the bankruptcy behind it, and Luckin&rsquo;s building toward its goal of between 4,800 and 6,900 stores.&nbsp;
<h3>The Bottom Line</h3>
Vince&rsquo;s Martin&rsquo;s Jan. 29 article suggested that you could make much worse speculative bets than Luckin Coffee. Prior to the Chapter 15 filing, I would have agreed. It wasn&rsquo;t the worst lottery ticket out there.&nbsp;
However, at $13, I wouldn&rsquo;t have bought it. Now that it&rsquo;s at $7 and likely to fall further, I definitely wouldn&rsquo;t. What was a speculative bet has become a death wish.&nbsp;
Luckin stock&rsquo;s day of reckoning is here.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.&nbsp;
Will Ashworth has written about investments full-time since 2008. Publications where he&rsquo;s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
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The post <a href="https://investorplace.com/2021/02/luckin-stock-the-chinese-coffee-operator-faces-reckoning/">Luckin Coffee&#8217;s Chapter 15 Filing Brings Day of Reckoning</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

Luckin Coffee's Chapter 15 Filing Brings Day of Reckoning

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
Let&rsquo;s be clear up front. Just because Luckin Coffee (OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>) has declared bankruptcy doesn&rsquo;t mean Luckin stock is going to zero.
	<div>
		<img src="https://investorplace.com/wp-content/uploads/2020/07/luckin_lkncy1600_f-300x169.jpg" alt="Luckin (LKNCY) logo on the wall of a coffee shop with a customer sitting at a table below it." width="300" height="169" /><div>Source: abolukbas / Shutterstock.com</div>
	</div>
	
Of course, it does at least create that possibility. More importantly, at this point, it&rsquo;s hard to imagine exactly why investors are sticking with this name.
This is a company that executed <a href="https://investorplace.com/2020/07/trouble-luckin-stock-accounting-fraud/" target="_blank">one of the biggest frauds</a> of the past decade, which it finally admitted not long after <a href="https://www.investors.com/news/luckin-coffee-stock-sinks-lower-hitting-back-false-claims-finances/#:~:text=Luckin%20Coffee%20(LK)%20reversed%20lower,%22rebutting%20any%20false%20claims.%22&amp;text=But%20on%20Monday%20Luckin%20Coffee,expenses%20to%20noncore%20net%20revenues." target="_blank">a vigorous denial</a>. After that caused a trading halt, the company then delisted Luckin stock from its U.S. exchange almost immediately. That led to a wave of forced selling, which crushed the stock price and reduced the value that fleeing shareholders could salvage.
Now, Luckin is <a href="https://investorplace.com/2021/02/luckin-stock-the-chinese-coffee-operator-faces-reckoning/" target="_blank">filing for Chapter 15 bankruptcy</a> in the U.S. And while it&rsquo;s largely a technical move, it still matters.
Luckin stock initially fell on the news. But investors, once again, are bidding up LKNCY, which rallied 10% on Monday. It&rsquo;s hard to see why. At this point, it&rsquo;s long past time to move on.
<h3>Why Is Luckin Declaring Bankruptcy?</h3>
It&rsquo;s possible that, to at least some extent, the Chapter 15 filing is much ado about nothing. Luckin Coffee&rsquo;s statement about the filing claimed that it was to &ldquo;<a href="https://investor.luckincoffee.com/news-releases/news-release-details/luckin-coffees-restructuring-efforts-move-forward-commencement" target="_blank">protect the interests of stakeholders,</a>&rdquo; which presumably includes shareholders.
And part of the point of the filing (again, per Luckin), is to gain U.S. recognition of a process already underway. In July, a court in the Cayman Islands, where Luckin is domiciled, approved a request <a href="https://investor.luckincoffee.com/news-releases/news-release-details/luckin-coffee-announces-appointment-light-touch-joint" target="_blank">to appoint provisional liquidators</a> in that jurisdiction.
That provisional liquidation is required because the fraud has left Luckin unable to provide audited financial statements. That, in turn, has meant the company has defaulted on its bonds. Bankruptcy is required to restructure those bonds.

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				</ul>As is usually the case, bankruptcy doesn&rsquo;t mean the end of the business. Chapter 15 in the U.S. is analogous to the well-known Chapter 11, except for foreign companies like Luckin. Most notably, the operations in China will continue through and likely after this process.
So this is mostly a technical maneuver. But it still puts shareholders at risk.

Bondholders may wind up with a good chunk of the company. The fact that Luckin bonds haven&rsquo;t fallen much on the bankruptcy news shows that the U.S. filing perhaps doesn&rsquo;t change the story all that much. The fact that those bonds still trade at only 76 cents on the dollar highlights the risk to shareholders, who are in line behind creditors.
This can go south in a hurry. And while shareholders may not get wiped out, they may see substantial dilution. Luckin&rsquo;s market capitalization, still close to $2 billion, doesn&rsquo;t seem to price in that risk.
<h3>A Broader Look at Luckin Stock</h3>
We&rsquo;ve seen elsewhere in the market that bankruptcy doesn&rsquo;t make a stock worthless. One of last year&rsquo;s <a href="https://investorplace.com/2020/08/3-reasons-to-kill-the-ignition-on-hertz-stock/" target="_blank">more well-covered stories</a> shows that fact.
Of course, another stock that <a href="https://investorplace.com/2020/04/energy-prices-new-lows-no-chk-stock/" target="_blank">briefly roared in bankruptcy</a> has come close to wiping out shareholders. At the least, recent history shows that these kinds of names are high-risk, high-reward propositions.
But the risk to Luckin stock of the bankruptcy can&rsquo;t be seen in a vacuum. Again, this is a company that has shown zero regard for shareholders since it went public in 2019.
The Luckin growth story admittedly still exists. But as the report from the Cayman liquidators showed, the company remains unprofitable. Positive free cash flow isn&rsquo;t expected <a href="https://investor.luckincoffee.com/static-files/177f69c0-b876-407e-ae2f-40f032af1ebd" target="_blank">until at least 2023</a>.
So investors need to think about everything that has to go right to support the current Luckin stock price, and the current market capitalization near $2 billion.

First, growth needs to continue, even against entrenched and well-managed competition. Second, Luckin needs to prove that it can drive profitability at the store level, let alone after corporate expenses. Those two risks alone would be meaningful, even if the fraud had never occurred.
Third, the bankruptcy process needs to play out favorably. And, fourth, shareholders need Luckin to stand up for them during that process, even though the company has shown no interest in doing so at any point in its history on the public markets.
That&rsquo;s an awful lot that needs to go right. And it all rests on investors trusting a company that hasn&rsquo;t merited that trust. Bankruptcy perhaps doesn&rsquo;t change the story all that much &mdash; but this story has been rotten for a long time.
On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in the article.
Matthew McCall left Wall Street to&nbsp;actually help investors &mdash; by getting them into the world&rsquo;s biggest, most revolutionary trends BEFORE anyone else. <a href="https://orders.investorplace.com/?cid=MKT464279&amp;eid=MKT468941&amp;encryptedSnaid=&amp;snaid=&amp;step=start">Click here to see what Matt has up his sleeve now</a>. As of this writing, Matt did not hold a position in any of the aforementioned securities.&nbsp;
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	</div>The post <a href="https://investorplace.com/moneywire/2021/02/why-bankruptcy-should-finally-end-the-case-for-luckin-stock/">Why Bankruptcy Should Finally End the Case for Luckin Coffee Stock</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

Why Bankruptcy Should Finally End the Case for Luckin Coffee Stock

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
It seems so long ago, but there was a point in time when Luckin Coffee&nbsp;(OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>) was hailed as the Chinese coffee chain equivalent of Starbucks&nbsp;(NASDAQ:<a href="https://investorplace.com/stock-quotes/sbux-stock-quote/">SBUX</a>). And with that, Luckin stock holders were posting pretty decent gains for a while.
	<div>
		<img src="https://investorplace.com/wp-content/uploads/2020/07/luckin_lkncy1600_e-300x169.jpg" alt="A Luckin (LKNCY stock) coffee cup on a table in a Luckin shop with the logo on the wall behind." width="300" height="169" /><div>Source: Ploy Makkason / Shutterstock.com</div>
	</div>
	
In hindsight, it might seem laughable that Zhejiang University of Finance and Economics researchers claimed, &ldquo;As Luckin Coffee enters&nbsp;the international market,&nbsp;<a href="http://encyclopub.com/ems/article/view/957">it has become a symbol of globalization, showing China&rsquo;s coffee brand</a>.&rdquo;
Of course, it&rsquo;s easy to mock past predictions. Before all of the scandals and scrutiny, the sky was the limit for Luckin stock. At least, that&rsquo;s the way it seemed.
A cascade of problems, unfortunately, has culminated in the worst possible outcome for Luckin stock holders. Yet, some folks would dare to buy the shares in light of this. Is this sensible, or self-sabotage?
<h3>A Baseless Bounce in Luckin Stock</h3>
In the middle of the day on Feb. 8, Luckin stock was absolutely flying. At one point, it was up around 23% and seemed to be approaching $8.70 per share.

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				</ul>This price action should signal good news for the company, right? That would make sense, but we&rsquo;re living in a time when short-term stock price moves aren&rsquo;t always driven by reason.
On the prior trading day, Luckin stock had nearly been cut by more than 40%. The share price plunged from $12.82 at the close of Feb. 4 to $7.05 at the Feb. 5 close. On Feb. 10, Luckin stock closed at $7.69.
Not to be morbid (I didn&rsquo;t make up this term), but the Feb. 8 bounce is likely nothing more than a dead-cat bounce. The fact is, some folks feel the need to buy every dip, even if there&rsquo;s no positive catalyst to justify the purchase.

<h3>A Cascade of Problems</h3>
I will now attempt to sum up the whirlwind of significant events regarding Luckin Coffee over the past year. So, here are the bullet points.
<ul><li>In early April 2020, it was revealed that some of the people at Luckin Coffee had <a href="https://investorplace.com/2020/05/trouble-brewing-for-lk-stock/" target="_blank">fabricated transactions and inflated the company&rsquo;s sales figures</a>. Shockingly, Luckin&rsquo;s internal investigation uncovered 2.2 billion yuan ($307.3 million at the time) worth of fake sales.</li>
<li>On June 26, the&nbsp;Nasdaq Exchange announced that it <a href="https://www.nasdaq.com/articles/luckin-coffee-to-be-delisted-from-nasdaq-on-june-29-2020-06-26">would delist Luckin stock</a> three days later. Not long afterwards, traders found the stock on the over-the-counter market instead of on the Nasdaq.</li>
<li>In July, board chairman and company co-founder <a href="https://www.cnbc.com/2020/07/13/luckin-coffee-ousts-chairman-lu-names-guo-as-ceo.html">Charles Zhengyao Lu was ousted</a>. He was replaced by new Chairman and CEO Jinyi Guo.</li>
<li>Then, in August, Luckin <a href="https://finance.yahoo.com/news/luckin-coffee-received-notifications-ms-130000227.html">received resignations from board members Jie Yang and Ying Zeng</a>. Thus, it appeared that Luckin would at least have a fresh lineup at the executive level.</li>
<li>After all of that, investors awaited the Chinese government&rsquo;s final judgment against Luckin. Reportedly, Chinese regulators <a href="https://www.reuters.com/article/us-luckin-coffee-investigation-fine-idUSKCN26D07G">decided to fine Luckin and a number of connected firms a total of 61 million yuan</a>, which equates to $9.45 million today.</li>
<li>Moreover, Luckin Coffee <a href="https://www.thestreet.com/markets/luckin-coffee-seeks-bankruptcy-capping-fake-sales-scandal?puc=yahoo&amp;cm_ven=YAHOO">paid a fine of $190 million to the Securities &amp; Exchange Commission</a> for its revenue overstatements.</li>
</ul><h3>&lsquo;B&rsquo; Is for Bankruptcy, Not Benefit</h3>
<a href="https://investorplace.com/2020/05/trouble-brewing-for-lk-stock/">In May</a> and then <a href="https://investorplace.com/2020/07/avoid-scandal-stocks-in-general-and-luckin-stock-in-particular/">again in August</a>, I practically begged people not to buy Luckin stock. I had a strong sense that a certain event was coming, which has indeed come to pass.
In what ought to be the final act of this Shakespearean tragedy, Luckin Coffee officially <a href="https://finance.yahoo.com/news/luckin-coffee-restructuring-efforts-move-084300305.html">filed for Chapter 15 bankruptcy protection</a> on Feb. 5.
If you can believe it, the company&rsquo;s press release somehow managed to spin this event in terms of stakeholder benefit:
&ldquo;The Company is negotiating with its stakeholders regarding the restructuring of the Company&rsquo;s financial obligations, to strengthen the Company&rsquo;s balance sheet and enable it to emerge from the Cayman Proceeding as a going concern, for the benefit of all stakeholders.&rdquo;
I know it&rsquo;s trendy to trade &ldquo;bankruptcy stocks,&rdquo; but I wouldn&rsquo;t touch this one with a 10-foot pole.
When companies spiral into bankruptcy proceedings, the retail shareholders almost always get the short end of the stick.
In all likelihood, the insiders and institutional-grade investors will get first dibs, while the retail traders will be the last ones to have access to the company&rsquo;s dwindling value.
<h3>The Bottom Line on Luckin Stock</h3>
Maybe you&rsquo;re thinking about buying shares of Luckin based on the &ldquo;greater fool theory,&rdquo; which states that you can make money from a bad stock because someone else will inevitably buy it at a higher price.
I say that&rsquo;s a fool&rsquo;s game and it&rsquo;s not worth playing. Stick to companies that are in growth mode, not bankruptcy mode. There are many great stocks to choose from, and Luckin stock&rsquo;s not one of them.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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Consider Luckin Coffee a Lesson, Not an Investment

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>

I know, I know. Hasn&rsquo;t there been enough attention given to the new paradigm of investing brought on by the Reddit stocks? Maybe so. The only thing that&rsquo;s surprising is how many people are surprised by it. What&rsquo;s occurring in the market was predictable.
Millions of potential traders are staying at home and finding themselves with limited forms of entertainment. In the early days of the novel coronavirus pandemic, even live sports was on a hiatus. It&rsquo;s not surprising that many individuals started eyeing the stock market as a place where they could find a release &ndash; and with commission-free trades &ndash; as a way to make a quick buck.
Plus they found kindred souls with the network of day traders who were already in the market. As the saying goes, what did you think was going to happen?
Well maybe not a short squeeze of the kind we saw, but there was certainly evidence that many of these traders were putting their money on stocks that were, shall we say, lacking on fundamentals.
The reality is that many inexpensive stocks, particularly those that fall in the category of penny stocks, are inexpensive for a reason. And it usually doesn&rsquo;t take much digging to find out why.
<ul><li><a href="https://investorplace.com/2021/02/7-stocks-to-buy-in-february/">7 Must-Own Stocks in February</a></li>
</ul>Call them meme stocks, casino stocks, or Robinhood stocks. Whatever term you choose, here are seven Reddit stocks you should avoid out of concern that the company could go bankrupt:
<ul><li>GameStop (NYSE:<a href="https://investorplace.com/stock-quotes/gme-stock-quote/">GME</a>)</li>
<li>Naked Brands (NASDAQ:<a href="https://investorplace.com/stock-quotes/nakd-stock-quote/">NAKD</a>)</li>
<li>Blue Apron (NYSE:<a href="https://investorplace.com/stock-quotes/aprn-stock-quote/">APRN</a>)</li>
<li>Casper Sleep (NYSE:<a href="https://investorplace.com/stock-quotes/cspr-stock-quote/">CSPR</a>)</li>
<li>AMC Entertainment Holdings (NYSE:<a href="https://investorplace.com/stock-quotes/amc-stock-quote/">AMC</a>)</li>
<li>Sundial Growers (NASDAQ:<a href="https://investorplace.com/stock-quotes/sndl-stock-quote/">SNDL</a>)</li>
<li>Genius Brands (NASDAQ:<a href="https://investorplace.com/stock-quotes/gnus-stock-quote/">GNUS</a>)</li>
</ul><h3></h3>
<h3>Reddit Stocks: GameStop (GME)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2019/08/gme-stock-1-300x169.jpg" alt="Retailers walk past a GameStop (GME) store in New York City, New York." width="300" height="169" /><div>Source: Northfoto / Shutterstock.com</div></div>
	
The title of this article is about Reddit stocks that &ldquo;deserve&rdquo; to go bankrupt. It&rsquo;s not about stocks that necessarily will do that. In the case of GameStop, it&rsquo;s highly unlikely that the company will go bankrupt in the near future. It&rsquo;s not that the company&rsquo;s business model has changed. But the company now has an opportunity to raise money through a share sale that it would have never had without the short squeeze.
And spinning that forward, the elevated price for GME stock may buy the company time to attempt a pivot to a more successful business model. The company was sitting on just over $600 million in cash when it last reported earnings and the company is seeing growth in e-commerce.
That being said, growth via reducing expenses and closing stores is not a formula for sustainable growth. GameStop was a troubled company before the pandemic, and it faces long odds to becoming a viable investment. Finally, consider that analysts give GameStop a consensus price target that is 40% lower than the stock was trading before the short squeeze.
<h3></h3>
<h3>Naked Brands (NAKD)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2019/11/nakd1600-300x169.jpg" alt="a man and woman wear plain white underclothes from Naked Brand (NAKD)" width="300" height="169" /><div>Source: Shutterstock</div></div>
	
When I heard that Naked Brands was becoming one of the Reddit stocks, I&rsquo;ll admit to laughing out loud. This is a troubled company that was on the verge of being delisted. However in this case, Naked Brands needs to give a cap tip to the Securities and Exchange Commission (SEC) for giving the company time to avoid having its stock delisted.
That gave some speculative investors an opportunity to make a quick trade. But I <a href="https://investorplace.com/2021/01/nakd-stock-lacks-market-share/">sent out the caution flag</a> just a few weeks ago:
If that&rsquo;s your jam, I&rsquo;m not here to stop you. The simple fact is that staying listed does not end the problems for Naked Brands. It also needs to be said that the company&rsquo;s problems are not new. The pandemic hasn&rsquo;t helped.
NAKD stock did not go into the stratosphere so Naked Brands will probably have to stave off bankruptcy in another way, perhaps through a reverse merger.
<ul><li><a href="https://investorplace.com/2021/02/7-stocks-to-buy-in-february/">7 Must-Own Stocks in February</a></li>
</ul>Either way this is a company with declining sales in a market with loads of competition.
<h3></h3>
<h3>Reddit Stocks:&nbsp;Blue Apron (APRN)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2019/07/aprn1600-300x169.jpg" alt="Blue Apron Stock" width="300" height="169" /><div>Source: Roman Tiraspolsky / Shutterstock.com</div></div>
	
Blue Apron was a pandemic winner. Millions of Americans were looking for a way to simplify and put some structure (and perhaps some caloric discipline) into their meal plans. Blue Apron and other meal kit services filled the bill. And it became one of the Reddit stocks when the stock jumped more than 50% in the middle of January despite no significant news.
APRN stock surged more than 600% at the onset of the pandemic as traders bid up the stock in anticipation of increasing revenue. Those gains have slowly eroded over the past year. The stock remains solidly above the penny-stock range. However there are some analysts that suggest <a href="https://marker.medium.com/the-pandemic-gave-blue-apron-a-lifeline-can-it-last-9a86120562e8">it&rsquo;s just a matter of time</a> before Blue Apron will find itself in bankruptcy.
The reason is simple enough. The market for meal kits was never as high as investors imagined. Not only does the company face competition from Amazon (NASDAQ:<a href="https://investorplace.com/stock-quotes/amzn-stock-quote/">AMZN</a>) but also from the likes of grocery store chains like Kroger (NYSE:<a href="https://investorplace.com/stock-quotes/kr-stock-quote/">KR</a>). The company also faces competition from private meal kit companies.
<h3></h3>
<h3>Casper Sleep (CSPR)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2019/07/ecommerce1600c-min-300x169.jpg" alt="" width="300" height="169" /><div>Source: Shutterstock</div></div>
	
Casper is one of the Reddit stocks on this list that may deserve to go bankrupt, but mostly because it probably should never have gone public. The company manufactures a range of what it terms &ldquo;sleep-centric&rdquo; products and is perhaps best known for its mattresses.
Don&rsquo;t get me wrong, direct-to-consumer will have a growing importance in the global economy. And Casper seems to have a quality product. However, it lacks the market share to generate meaningful revenue. That&rsquo;s not surprising. One year ago, the review site Goodbed.com <a href="https://www.forbes.com/sites/greatspeculations/2020/02/05/dont-buy-casper-the-latest-money-losing-ipo/?sh=363ff6714858">cited at least 175 companies were competing with Casper</a> in the &ldquo;bed-in-a-box&rdquo; category.
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</ul>And that means that the company has to attempt to thread a difficult needle of becoming a profitable company with flat to shrinking revenue. The pandemic seems to have helped the company a bit. But I would imagine that the company&rsquo;s products are somewhat of a one-off purchase. That means that CSPR stock will remain a troubled stock that investors should avoid.
<h3></h3>
<h3>Reddit Stocks:&nbsp;AMC Entertainment Holdings (AMC)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2019/07/AMC1600-300x169.jpg" alt="Neon sign of an AMC (AMC) theater" width="300" height="169" /><div>Source: rblfmr / Shutterstock.com</div></div>
	
AMC Entertainment Holdings is in a similar position to GameStop. The company faces a difficult business model. There is a core audience that still wants the cinema experience. But many consumers were opting to stay home. In some cases, it was because of the home theater movement. Hey, when you&rsquo;ve dropped that kind of money into home entertainment, there&rsquo;s an economic argument for staying home.
And now when you layer the pandemic on top of it, the theater chain will face a tough road forward. In December, CNBC reported these <a href="https://www.cnbc.com/2020/12/16/amc-could-benefit-from-bankruptcy-analysts-say.html">sobering numbers</a>. The company had almost $5 billion in debt before the pandemic. And the company will need at least $750 million of additional liquidity to fund its cash requirements through this year.
At the time, CNBC said bankruptcy might be the company&rsquo;s best option and it&rsquo;s hard to argue with that logic. AMC stock did briefly get caught up in the short-squeeze movement, but it has been short lived.&nbsp; Maybe fundamentals do matter.
<h3></h3>
<h3>Sundial Growers (SNDL)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2019/07/marijuana1600b-300x169.jpg" alt="marijuana stocks image of marijuana leaf on top of several one-hundred dollar bills" width="300" height="169" /><div>Source: Shutterstock</div></div>
	
The saying timing is everything applies to the bullish and the bearish case for Sundial Growers. On the one hand, Sundial went public in 2019 and missed out on the cannabis stock bubble of 2018. On the other hand, SNDL stock is up, wait for it, 768% since Election Day. The only real reason is that there is growing hope that with the Democratic party in charge of both houses of Congress, cannabis will be legalized in the United States.
If that happens, Sundial may live to see another day. But I wrote about Sundial in January and I see the company as a <a href="https://investorplace.com/2021/01/sndl-stock-lacks-solid-standalone-narrative/">takeover target</a> more than anything else. The company focuses on the premium end of the market, and that may make it appealing to any number of companies looking to gain a foothold in the U.S. market.
<ul><li><a href="https://investorplace.com/2021/02/7-stocks-to-buy-in-february/">7 Must-Own Stocks in February</a></li>
</ul>However remember that legalization at the federal level is not a foregone conclusion. And without it, there seems to be little chance that Sundial will avoid bankruptcy.
<h3></h3>
<h3>Reddit Stocks:&nbsp;Genius Brands (GNUS)</h3>
	<div><img src="https://investorplace.com/wp-content/uploads/2020/08/gnus1600-300x169.jpg" alt="An image of two young girls looking at a tablet and smiling while an adult reads in the background." width="300" height="169" /><div>Source: Syda Productions/ShutterStock.com</div></div>
	
A free streaming channel targeted at kids in the middle of a pandemic. What could be better? Well it turns out that Disney (NYSE:<a href="https://investorplace.com/stock-quotes/dis-stock-quote/">DIS</a>) may have had something to say about that.
There are many problems with GNUS stock that support it trading as a penny stock. Perhaps the most obvious is that <a href="https://investorplace.com/2020/08/gnus-stock-offers-investors-narrow-path/">it has a marketing problem</a>. It is attempting to pass itself off as an educational option with its Kartoon Channel. But it also recently announced that Sonic the Hedgehog and Pac-Man are part of its portfolio.
Plus, the larger problem is that despite the national headlines, a large number of children did go back to school and continue to be educated in person, particularly in the age group targeted by Genius Brands.
And as Larry Ramer wrote, the company is facing an <a href="https://investorplace.com/2020/09/gnus-stock-isnt-a-smart-pick/">entirely plausible legal challenge</a> that it misled investors to the benefit of insiders. As investors have seen with companies like Luckin Coffee (OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>), that is not a situation easily overlooked by investors.
On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. 
Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.
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The post <a href="https://investorplace.com/2021/02/7-reddit-stocks-primed-for-bankruptcy/">7 Reddit Stocks That Deserve to Go Bankrupt</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

7 Reddit Stocks That Deserve to Go Bankrupt

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
On Tuesday, shares in EHang (NASDAQ:<a href="https://investorplace.com/stock-quotes/eh-stock-quote/">EH</a>), an upstart Chinese autonomous passenger drone company, fell 62% after short seller Wolfpack Research published a report calling EH stock &ldquo;a stock promotion destined to crash and burn.&rdquo; Though shares have since bounced back over 50%, investors still face many questions about whether to jump back into EHang.
	<div>
		<img src="https://investorplace.com/wp-content/uploads/2021/02/magnifying_glass_watch_1600-300x169.jpg" alt="A photo of a hand holding a magnifying glass and looking at a paper." width="300" height="169" /><div>Source: Sergii Gnatiuk/ShutterStock.com</div>
	</div>
	
Before investing or selling your stake, here are the seven things investors need to know about EH stock.
<h3>1. Wolfpack Claims That EHang Faked Its Revenues</h3>
In its 33-page paper, Wolfpack Research claimed that EHang&rsquo;s largest distributor, Shanghai Kunxiang, had &ldquo;signed sham sales contracts to benefit its investment in EH.&rdquo; They backed up these severe allegations by saying that Kunxiang &ldquo;did not want to sell EH&rsquo;s products&rdquo; to Wolfpack researchers.
Law firms have <a href="https://www.businesswire.com/news/home/20210216006240/en/Glancy-Prongay-Murray-LLP-a-Leading-Securities-Fraud-Law-Firm-Announces-Investigation-of-EHang-Holdings-Limited-EH-on-Behalf-of-Investors">already started investigations</a> to find the truthfulness of these allegations. But given the tightly controlled ownership structure of EH, it could be months before regular shareholders gain clarity.
<h3>2. Photographs Show Empty Factories and Non-Existent Offices</h3>
Wolfpack Research sent a team to inspect EHang and Shanghai Kunxian&rsquo;s locations. One place listed on Kunxiang&rsquo;s Qixinbao page listed an office address on the 13th floor of a building with only 11 stories. Another area showed an empty factory <a href="https://wolfpackresearch.com/research/ehang/" target="_blank">without &ldquo;any production equipment</a> or raw material inventory on site.&rdquo;
The team&rsquo;s suspicions further rose when they visited EH&rsquo;s &ldquo;design and testing center,&rdquo; which turned out to be an abandoned amusement park.
<h3>3. SEC Filings Raise Red Flags</h3>
In September, Ehang filed two sales contracts with the Securities and Exchange Commission. The first showed a stunningly large <a href="https://www.sec.gov/Archives/edgar/data/1759783/000095012319008851/filename16.htm">450 million RMB sale</a> for three sets of autonomous aerial vehicles (AAVs) to its distributor. The second contract showed a far lower <a href="https://www.sec.gov/Archives/edgar/data/1759783/000095012319008851/filename17.htm">30 million RMB</a> sale for 20 AAV sets. The price discrepancy should have investors asking questions. Why would EHang sell AAVs at such different prices, then suddenly stop publishing information?
The concern could spill over into EH&rsquo;s regular filings with the SEC. The company&rsquo;s Chinese-based auditors, Ernst &amp; Young Hua Ming LLP, is the same group that audited the now-disgraced coffee chain Luckin Coffee (OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>). The coffee chain would later admit to filing false financial statements.

<h3>4. Wolfpack Research Is Short EH</h3>
The short sellers timed their release to coincide with the Chinese New Year, ensuring that U.S. markets would open before the company had time to publish a rebuttal. EH supporters might see this as a move for short sellers to achieve maximum return at shareholders&rsquo; expense.
The plan, however, worked. The short <a href="https://ir.ehang.com/node/7581/pdf">two-paragraph statement</a> published by EH in response gave little clarity for investors.
Some commentators have already questioned Wolfpack&rsquo;s legitimacy. One pointed out that Wolfpack&rsquo;s Youtube videos of factories <a href="https://www.reddit.com/r/stocks/comments/llnv2o/eh_ehang_holdings_a_great_opportunity_to_buy/">missed its timestamp metadata</a>, among numerous other issues. Still, until EHang can produce a more substantial rebuttal, shares could fall further as investors question the company&rsquo;s legitimacy.
<h3>5. EH Stock Still Elevated</h3>
Though EHang&rsquo;s shares have fallen 40% from their peak, shares are still up 230% from the beginning of the year. That suggests that investors aren&rsquo;t sure if this $4 billion company is outright fraud.
Investors will draw two very different conclusions from this. On the one hand, EH bulls might say Wolfpack Research is dead wrong about EH stock; the short seller targeted Inspire Medical Systems (NYSE:<a href="https://investorplace.com/stock-quotes/insp-stock-quote/">INSP</a>) in April 2020. Its shares have risen 220% as the &ldquo;terminally unprofitable business&rdquo; refused to die. EH stock&rsquo;s resilience would stand as proof that markets disagree with Wolfpack&rsquo;s claims.
On the other hand, EH cynics might see EH&rsquo;s high price as a dangerous way to lose even more money. At $70, the company still has a great deal of potential downside if regulators discover falsehoods in its $26 million of sales.
<h3>What to Do With EH Stock?</h3>
It&rsquo;s still unclear where EHang stock will go. Because of the Chinese New Year holiday, the company has not yet wholly refuted Wolfpack&rsquo;s fraud claims. If it turns out EH is a legitimate and growing business, shares could quickly recover; analysts believe the AAV market will grow at <a href="https://www.fortunebusinessinsights.com/autonomous-aircraft-market-103266">22% per year through 2027</a>.
However, if the SEC finds issues with EHang&rsquo;s financials, the company could have a long way to fall. Either way, it looks like it&rsquo;s going to be a bumpy ride.
On the date of publication, Tom Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tom Yeung, CFA, is a registered investment advisor on a mission to bring simplicity to the world of investing.
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	</div>The post <a href="https://investorplace.com/2021/02/eh-stock-7-things-for-investors-to-know/">EH Stock: 5 Things for Investors to Know as EHang Refutes &#8216;Sham' Claims</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

EH Stock: 5 Things for Investors to Know as EHang Refutes 'Sham' Claims

Luckin Coffee Update - I Still Think It's Toast

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>

For a while, things were dicey between the United States and China on the economic front. The fundamentals were fine, but the rhetoric between the two countries was detrimental to equities prices &mdash; especially Chinese stocks.
Nonetheless, that is in the past and the new administration promises to be more progressive. However, we&rsquo;ve not seen evidence of this yet. In fact, <a href="https://www.cnbc.com/2021/02/19/biden-says-us-and-europe-must-push-back-against-chinas-economic-abuses.html" target="_blank">there could be some trouble brewing</a> but nothing concrete yet.
That said, now we will look at three Chinese stocks to trade positively at least for the next six months. However, we first should acknowledge the fact that there is the potential for macroeconomic debacles. In the U.S., we still have millions unemployed. Small businesses in America are on life support, especially in the states that extended the lockdowns.
The government knows this, and that&rsquo;s why they are pumping another $1.9 trillion in stimulus. They wouldn&rsquo;t do this if the economy was healthy. Moreover, the Federal Reserve is also on schedule to pour $1.4 trillion in liquidity in 12 months. Things are not well!
In spite of this, the equity indices made new all-time highs this week mere hours after the NASDAQ Composite fell 4%. Clearly sentiment is on edge and traders are trigger Happy. Therefore, as much as I like any stock, the opinion has comes with a giant caveat. There is definite extrinsic risk to all bullish theses. Meaning that good stocks can fall through no fault of their own.
When it comes to opportunities from Chinese equities I stick with, the major names. This all but eliminates the possibility of nasty surprises like what happened with Luckin Coffee (OTCMKTS:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>). Spoiler alert, Baidu (NASDAQ:<a href="https://investorplace.com/stock-quotes/bidu-stock-quote/">BIDU</a>) will not be one of the three in this article. This is nothing against the company, and it&rsquo;s purely based on technicals. BIDU stock has gone too far for it to be an obvious entry point at these altitudes. However, I will keep it on my watch list for future dip opportunities.

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				</ul>With all of that in mind, our three Chinese stocks we&rsquo;re considering are:
<ul><li>Alibaba (NYSE:<a href="https://investorplace.com/stock-quotes/baba-stock-quote/">BABA</a>)</li>
<li>Nio (NYSE:<a href="https://investorplace.com/stock-quotes/nio-stock-quote/">NIO</a>)</li>
<li>iShares China Large-Cap ETF (NYSEARCA:<a href="https://investorplace.com/stock-quotes/fxi-stock-quote/">FXI</a>)</li>
</ul>Now, let&rsquo;s dive in and take a closer look at each one.

<h3>Chinese Stocks to Buy: Alibaba (BABA)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/baba.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/baba-300x160.png" alt="Chinese Stocks: Alibaba (BABA) Stock Chart Showing Support Below" width="300" height="160" /> Click to Enlarge</a><div>Source: Charts by TradingView</div></div>
	
Very few companies can generate the amount of sales that Alibaba can. Their revenues from the <a href="https://edition.cnn.com/2020/11/10/tech/singles-day-2020-alibaba-intl-hnk/index.html">2020 Singles day alone</a> were as big as Boeing (NYSE:<a href="https://investorplace.com/stock-quotes/ba-stock-quote/">BA</a>) full-year revenues in 2019 &mdash; and 30% larger than 2020&rsquo;s. Potential this big is hard to fail. Up until recently, management was beyond reproach. They have been executing flawlessly for years and investors trusted it. Then, things went south with co-founder Jack Ma&rsquo;s confrontation with Chinese officials. BABA stock collapsed 30% in the process. It is on the mends now but there is a lot of repair-work to do.
Meanwhile, there is no denying its fundamental value. Alibaba stock is cheap even when we compare it to the huge tech stocks. From the profitability perspective, it&rsquo;s in line with all of them. The price-earnings (P/E) ratio is under 30 and slightly cheaper than Apple (NASDAQ:<a href="https://investorplace.com/stock-quotes/aapl-stock-quote/">AAPL</a>). BABA is a growth stock, and for it to beat a stagnant company like AAPL stock on profits is impressive.
From the growth perspective, its price-sales (P/S) ratio is 7.4. This is much more expensive than Amazon&rsquo;s (NASDAQ:<a href="https://investorplace.com/stock-quotes/amzn-stock-quote/">AMZN</a>) 4.3, but is lower than the rest of the giants. Any which way you slice it, BABA stock it is worth owning. And I am confident that buying at these levels over time is not going to be a financial mistake.
Of course, it will need the help of the entire stock market. Therefore, I wouldn&rsquo;t take a full size position so to leave room for error. The stock chart is constructive and shows a solid base just below current prices. That cluster below came courtesy of the disaster that Jack Ma caused. Assuming that the episode is in the rear view mirror, then it&rsquo;s the base of another rally.

<h3>Nio (NIO)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/nio-3.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/nio-3-300x160.png" alt="Chinese Stocks: NIO Stock Chart Showing Potential Upside Path" width="300" height="160" /> Click to Enlarge</a><div>Source: Charts by TradingView</div></div>
	
One of the hottest investing themes since last year has been electric vehicles (EVs). At the same time, <a href="https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter" target="_blank">major money managers are also pursuing</a> environmental, social and governance (ESG) investing. Add the two, and we must include NIO as one of the Chinese stocks to own for the future.
This is not a secret, so it&rsquo;s been on fire as of late. Luckily, though, it just had a shakeout.
During the Tuesday trade, the indices hit a pothole. The NASDAQ Composite sold off 4% in a jiffy, which took Tesla (NASDAQ:<a href="https://investorplace.com/stock-quotes/tsla-stock-quote/">TSLA</a>) and NIO down hard with it. Testament to the bullish thesis is how quickly investors bought those dips. If you blinked, you missed it. The low for NIO stock was $41.66, and the rally back from it was extremely fast. In fact, on Wednesday, it was already back to $52 per share.
That is astonishing confirmation that investors have a big appetite for its potential. This is for good reason because they operate in the largest market on the planet. The fact that they have existing sales makes them almost unique. Besides Tesla, the bulk of the hopeful EV companies have nothing but pipe dreams now.
Overall, Nio is real right now. I can confidently own shares for the long term. Fundamentally it&rsquo;s not cheap, but that&rsquo;s not the point. They have to spend a lot to get a whole industry off the ground.

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				</ul>Tesla did a lot of the legwork already, and NIO is just adding to the effort. It&rsquo;s a straight-forward thesis of massive market potential. Currently, the world produces about three million EVs, versus over 80 million fossil fuel engines.

<h3>iShares China Large-Cap ETF (FXI)</h3>
	<div><a href="https://investorplace.com/wp-content/uploads/2021/02/fxi.png"><img src="https://investorplace.com/wp-content/uploads/2021/02/fxi-300x160.png" alt="Chinese Stocks: iShares China Large-Cap ETF (FXI) Stock Chart Showing Mega-Breakout Opportunity" width="300" height="160" /> Click to Enlarge</a><div>Source: Charts by TradingView</div></div>
	
Sometimes it&rsquo;s a good idea to diversify risk from single stocks. That said, the FXI ETF would place a bet on Chinese stocks but as a whole. This allows investor to participate in the future of that market without exposing themselves to singularities. My only hesitation here is purely technical.
The weekly chart of the FXI stock shows three prior failures around these levels. The downside from them each time was significant. The offsetting argument is that the daily chart suggests that this time it could be different. The price action has been trending up with higher-lows. Eventually if this continues, the buyers will breach through the resistance.
If that happens, the bulls will rush through it and overwhelm the sellers. That breakout would have a tremendous upside potential. The longer it takes to breakout from a single point, the greater the upside opportunity becomes.
Furthermore, there&rsquo;s no need to talk about the fundamentals of the FXI. It inherits them from all the major stocks that comprise it. These are the ones we read about in the news. The largest few are Tencent (OTCMKTS:<a href="https://investorplace.com/stock-quotes/tcehy-stock-quote/">TCEHY</a>), JD.com (NASDAQ:<a href="https://investorplace.com/stock-quotes/jd-stock-quote/">JD</a>), BIDU and more.
In closing, I&rsquo;d like to remind the readers that having conviction is great, but it shouldn&rsquo;t be blind. I&rsquo;m confident of my chart reading abilities and bullish theses. However, I am also confident that I cannot foresee surprise hiccups coming. Meaning that I should break up my positions into smaller entry batches.
It&rsquo;s also a good idea to diversify the investment methods when possible. Selling put options instead of buying shares is a great way to create room for error. When used responsibly, options offer alternatives that mitigate risk. The myths around them are too general to be true. They definitely deserve further investigation for those who don&rsquo;t know them already.
On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article.&nbsp;
Nicolas Chahine is the managing director of&nbsp;SellSpreads.com.
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The post <a href="https://investorplace.com/2021/02/3-chinese-stocks-to-trade-in-2021/">3 Chinese Stocks To Trade in 2021</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

3 Chinese Stocks To Trade in 2021

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
Although Clover Health (NASDAQ:<a href="https://investorplace.com/stock-quotes/clov-stock-quote/">CLOV</a>) has great potential, allegations against the company by a research firm make CLOV stock too risky to buy or hold at this point.
	<div>
		<img src="https://investorplace.com/wp-content/uploads/2020/09/biotech-stocks-300x169.jpg" alt="A scientist holding up her biotech experiment in a small Petri dish." width="300" height="169" /><div>Source: Shutterstock</div>
	</div>
	
The allegations were made by Hindenburg Research in early February. Hindenburg has shorted stocks that it issued reports about it in the past. When it issued the report on Clover, however, <a href="https://seekingalpha.com/news/3658363-clover-heath-drops-after-hindenburg-research-releases-new-short-call" target="_blank">it claimed that it was not</a> shorting the company&rsquo;s shares.
Hindenburg<a href="https://hindenburgresearch.com/clover/?source=content_type%3Areact%7Cfirst_level_url%3Anews%7Csection%3Amain_content%7Cbutton%3Abody_link" target="_blank"> alleged that Clover</a> is under active investigation by the Department of Justice. The agency, which has issued a request for information to the company, is probing at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals according to Hindenburg, citing documents that it had seen.

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				</ul>The firm stated that an &ldquo;independent&rdquo; Clover subsidiary offers seniors advice in selecting Medicare plans.
Citing former Clover employees, Hindenburg also alleged that much of Clover&rsquo;s revenue is fueled by a brokerage firm controlled by Clover&rsquo;s Head of Sales, Hiram Bermudez.
Finally, according to Hindenburg, former employees charged that &ldquo;Clover&rsquo;s software is primarily a tool&rdquo; to help the company obtain more money from Medicare using irrelevant diagnoses.
In past columns about Luckin Coffee (OTC:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>), I&rsquo;ve noted that a number of companies that committed improprieties had managed to stay in business and do relatively well.
In general, I do believe that the government will likely not seek to bankrupt companies unless their entire business is fraudulent or they are materially harming citizens&rsquo; health and/or their welfare.
However, I do believe that regulators could look to severely punish and even bankrupt a company whose business model is based, partly or completely, on defrauding the government. Further, Hindenburg does appear to be alleging that Clover may be materially hurting some senior citizens.
<h3>Hindenburg&rsquo;s Credibility and CLOV Stock</h3>
In the past few months, I&rsquo;ve examined several reports or summaries of reports by Hindenburg. Although I think that sometimes the firm exaggerates the importance of its findings, especially in the case of Nikola (NASDAQ:<a href="https://investorplace.com/stock-quotes/nkla-stock-quote/">NKLA</a>), its statements do appear to generally be accurate.
After reviewing Clover&rsquo;s <a href="https://medium.com/clover-off-the-charts/in-response-to-short-seller-firms-questions-47798b0b76da" target="_blank">lengthy response to Hindenburg&rsquo;s report</a>, I believe that the company did not dispute the most important allegations against it by the firm.
Specifically, Clover appears to have tacitly admitted and/or failed to dispute that it was being investigated by the Department of Justice and that its subsidiary claims to be independent but refers business to Clover.
Further, Clover did not directly dispute Hindenburg&rsquo;s allegations about the percentage of its revenue that is allegedly &ldquo;fueled&rdquo; by the brokerage company partly owned by its head of sales. Clover admitted that its executive has a 50% stake in the brokerage firm.
Finally, on the crucial issue of whether Clover&rsquo;s software helps the company obtain more money, Clover does not directly dispute the charge. Instead, it focuses on the idea that doctors can choose to disagree with the diagnoses produced by Clover&rsquo;s software and will not be directly penalized by the company for doing so.
However, I can think of two possible reasons why doctors may not want to disagree very much with the diagnoses produced by the software.
First, if the software does tend to make suggestions that raise Medicare payments, the doctors themselves will likely make more money if they agree with those suggestions.
Secondly, Clover admits that it pays personal care physicians (PCPs) $200 per visit when they use its software.
&ldquo;[T]his translates to roughly twice the traditional Medicare fees paid to PCPs for an office visit, more in line with fees paid to specialists,&rdquo; according to Clover&rsquo;s response.
I believe that PCPs could worry that&nbsp;they will lose the lucrative $200 payments if they disagree with Clover&rsquo;s software too often.
<h3>Clover Has Tremendous Potential</h3>
Seeking Alpha columnist Jhon Idrovo <a href="https://seekingalpha.com/article/4405839-clover-health-growth-quality" target="_blank">reported that Clover&rsquo;s</a> software has been able to, on average, lower seniors&rsquo; out-of-pocket costs while giving &ldquo;the substantial majority of its members&rdquo; more &ldquo;freedom of choice&rdquo; than its competitors.
Finally, the columnist noted that the company&rsquo;s membership has climbed at a compound annual growth rate of 27% since 2017, while enrollment in Medicare Advantage overall is continuing to increase quite rapidly.
Given these points, Clover&rsquo;s top and bottom lines could indeed jump tremendously in coming years, making CLOV stock a big winner for long-term investors.
<h3>The Bottom Line on CLOV Stock</h3>
Hindenburg&rsquo;s allegations against Clover seem to have some credibility. Further, I agree with the firm&rsquo;s assessment that, because of its dependence on Medicare, the insurer could face an existential risk if the government determines that it has engaged in extensive, material wrongdoing.
After all,&nbsp; the government could fairly easily eject Clover from the Medicare Advantage program, potentially dealing the company an existential blow in the process.
On the date of publication, Larry Ramer held a long position in Luckin Coffee.&nbsp;
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel&rsquo;s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.
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	</div>The post <a href="https://investorplace.com/2021/02/the-allegations-against-clover-make-clov-stock-too-risky-right-here/">The Allegations Against Clover Make CLOV Stock Too Risky Right Here</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

The Allegations Against Clover Make CLOV Stock Too Risky Right Here

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
Although Clover Health (NASDAQ:<a href="https://investorplace.com/stock-quotes/clov-stock-quote/">CLOV</a>) has great potential, allegations against the company by a research firm make CLOV stock too risky to buy or hold at this point.
The allegations, accusing the company of improprieties, were made by Hindenburg Research in early February. Hindenburg has shorted stocks that it issued reports about it in the past. When it issued the report on Clover, however, <a href="https://seekingalpha.com/news/3658363-clover-heath-drops-after-hindenburg-research-releases-new-short-call" target="_blank">it claimed that it was not</a> shorting the company&rsquo;s shares.
<h3>Hindenburg&rsquo;s Allegations Against Clover</h3>
Hindenburg<a href="https://hindenburgresearch.com/clover/?source=content_type%3Areact%7Cfirst_level_url%3Anews%7Csection%3Amain_content%7Cbutton%3Abody_link" target="_blank"> alleged that Clover</a> is under &rdquo; active investigation by the Department of Justice.&rdquo; The agency, which has issued a request for information to the company, is probing &ldquo;at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals,&rdquo; charged Hindenburg, citing documents that it had seen.
The firm stated that a Clover&nbsp; subsidiary which says that it is &ldquo;independent&rdquo; offers advice to seniors on &ldquo;selecting Medicare plans.&rdquo;&nbsp; Citing former Clover employees, Hindenburg also alleged that &ldquo;much&rdquo; of Clover&rsquo;s revenue is &ldquo;fueled by&rdquo; a brokerage firm &rdquo; controlled by Clover&rsquo;s Head of Sales, Hiram Bermudez..&rdquo; Finally, according to Hindenburg, former employees charged that &ldquo;Clover&rsquo;s software is primarily a tool to help the company&rdquo; obtain more money from Medicare using &ldquo;irrelevant diagnoses.&rdquo;
In past columns about Luckin Coffee (OTC:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>), I&rsquo;ve noted that a number of companies which committed improprieties had managed to stay in business and do relatively well. In general, I do believe that the government will likely not seek to bankrupt companies unless their entire business is fraudulent or they are materially harming citizens&rsquo; health and/or their welfare.
However, I do believe that regulators could look to severely punish and even bankrupt a company whose business model is based, partly or completely, on defrauding the government. Further, Hindenburg does appear to be alleging that Clover may be materially hurting some senior citizens.
<h3>Assessing Hindenburg&rsquo;s Credibility</h3>
In the past few months, I&rsquo;ve examined several reports or summaries of reports by Hindenburg. Although I think that sometimes the firm exaggerates the importance of its findings, especially in the case of Nikola (NASDAQ:<a href="https://investorplace.com/stock-quotes/nkla-stock-quote/">NKLA</a>), its statements do appear to generally be accurate.
After reviewing Clover&rsquo;s <a href="https://medium.com/clover-off-the-charts/in-response-to-short-seller-firms-questions-47798b0b76da" target="_blank">lengthy response to Hindenburg&rsquo;s report</a>, I believe that the company did not dispute the most important allegations against it by the firm. Specifically, Clover appears to have tacitly admitted and/or failed to dispute that it was being investigated by the Department of Justice and that&nbsp; its subsidiary claims to be independent but refers business to Clover.
Further, Clover did not directly dispute Hindenburg&rsquo;s allegations about the percentage of its revenue that is allegedly &ldquo;fueled&rdquo; by the brokerage company partly owned by its head of sales. (Clover admitted that its executive has a 50% stake in the&nbsp; brokerage firm).
Finally, on the crucial issue of whether Clover&rsquo;s software helps the company obtain more money, Clover does not directly dispute the charge. Instead, it focuses on the idea that doctors can choose to disagree with the diagnoses produced by Clover&rsquo;s software and will not be directly penalized by the company for doing so.
However, I can think of two possible reasons why doctors may not want to disagree very much with the diagnoses produced by the software. First, if the software does tend to make suggestions that raise Medicare payments, the doctors themselves will likely make more money if they agree with those suggestions. Secondly, Clover admits that&nbsp; it pays personal care physicians (PCPs) &ldquo;$200 per visit&rdquo; when they use its software. It also states that, &ldquo;this translates to roughly twice the traditional Medicare fees paid to PCPs for an office visit, more in line with fees paid to specialists.&rdquo; I believe that PCPs could worry that, if they disagree with Clover&rsquo;s software too often, they will lose the lucrative $200 payments.
<h3>Clover Has Tremendous Potential</h3>
Seeking Alpha columnist Jhon Idrovo <a href="https://seekingalpha.com/article/4405839-clover-health-growth-quality" target="_blank">reported that Clover&rsquo;s</a> software has been able to, on average, lower seniors&rsquo; out-of-pocket costs while giving &nbsp;&ldquo;the substantial majority of its members&rdquo; more &ldquo;freedom of choice&rdquo; than its competitors. Finally, the columnist noted that the company&rsquo;s membership has climbed at a compound annual growth rate of 27% since 2017, while enrollment in Medicare Advantage overall is continuing to increase quite rapidly.
Given these points, Clover&rsquo;s top and bottom lines could indeed jump tremendously in coming years, making CLOV stock a big winner for long-term investors.
<h3>The Bottom Line on CLOV Stock</h3>
Hindenburg&rsquo;s allegations against Clover seem to have some credibility. Further, I agree with the firm&rsquo;s assessment that, because of its dependence on Medicare,&nbsp; the insurer could face an &ldquo;existential&nbsp; risk&rdquo; if the government determines that it has engaged in extensive, material wrongdoing. After all,&nbsp; the government could fairly easily eject Clover from the Medicare Advantage program, potentially dealing the company an existential blow in the process.
On the date of publication, Larry Ramer held a long position in Luckin Coffee.&nbsp;
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel&rsquo;s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.
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					</div>
	</div>The post <a href="https://investorplace.com/2021/02/the-allegations-against-clover-make-clov-stock-too-risky-right-here/">The Allegations Against Clover Make CLOV Stock Too Risky</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

The Allegations Against Clover Make CLOV Stock Too Risky

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
Editor&rsquo;s Note: This article was updated on March 2, 2021, to specify particular information that was directly quoted from a press release. 
Although Clover Health (NASDAQ:<a href="https://investorplace.com/stock-quotes/clov-stock-quote/">CLOV</a>) has great potential, allegations against the company by a research firm make CLOV stock too risky to buy or hold at this point.
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The allegations were made by Hindenburg Research in early February. Hindenburg has shorted stocks that it issued reports about it in the past. When it issued the report on Clover, however, <a href="https://seekingalpha.com/news/3658363-clover-heath-drops-after-hindenburg-research-releases-new-short-call" target="_blank">it claimed that it was not</a> shorting the company&rsquo;s shares.
Hindenburg<a href="https://hindenburgresearch.com/clover/?source=content_type%3Areact%7Cfirst_level_url%3Anews%7Csection%3Amain_content%7Cbutton%3Abody_link" target="_blank"> alleged that Clover</a> is under active investigation by the Department of Justice. The agency, which has issued a request for information to the company, is probing &ldquo;at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals&rdquo; according to Hindenburg, citing documents that it had seen.

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				</ul>The firm stated that an &ldquo;independent&rdquo; Clover subsidiary offers seniors advice in selecting Medicare plans.
Citing former Clover employees, Hindenburg also alleged that much of Clover&rsquo;s revenue is fueled by a brokerage firm controlled by Clover&rsquo;s Head of Sales, Hiram Bermudez.
Finally, according to Hindenburg, former employees charged that &ldquo;Clover&rsquo;s software is primarily a tool&rdquo; to help the company obtain more money from Medicare using irrelevant diagnoses.
In past columns about Luckin Coffee (OTC:<a href="https://investorplace.com/stock-quotes/lkncy-stock-quote/">LKNCY</a>), I&rsquo;ve noted that a number of companies that committed improprieties had managed to stay in business and do relatively well.
In general, I do believe that the government will likely not seek to bankrupt companies unless their entire business is fraudulent or they are materially harming citizens&rsquo; health and/or their welfare.
However, I do believe that regulators could look to severely punish and even bankrupt a company whose business model is based, partly or completely, on defrauding the government. Further, Hindenburg does appear to be alleging that Clover may be materially hurting some senior citizens.
<h3>Hindenburg&rsquo;s Credibility and CLOV Stock</h3>
In the past few months, I&rsquo;ve examined several reports or summaries of reports by Hindenburg. Although I think that sometimes the firm exaggerates the importance of its findings, especially in the case of Nikola (NASDAQ:<a href="https://investorplace.com/stock-quotes/nkla-stock-quote/">NKLA</a>), its statements do appear to generally be accurate.
After reviewing Clover&rsquo;s <a href="https://medium.com/clover-off-the-charts/in-response-to-short-seller-firms-questions-47798b0b76da" target="_blank">lengthy response to Hindenburg&rsquo;s report</a>, I believe that the company did not dispute the most important allegations against it by the firm.
Specifically, Clover appears to have tacitly admitted and/or failed to dispute that it was being investigated by the Department of Justice and that its subsidiary claims to be independent but refers business to Clover.
Further, Clover did not directly dispute Hindenburg&rsquo;s allegations about the percentage of its revenue that is allegedly &ldquo;fueled&rdquo; by the brokerage company partly owned by its head of sales. Clover admitted that its executive has a 50% stake in the brokerage firm.
Finally, on the crucial issue of whether Clover&rsquo;s software helps the company obtain more money, Clover does not directly dispute the charge. Instead, it focuses on the idea that doctors can choose to disagree with the diagnoses produced by Clover&rsquo;s software and will not be directly penalized by the company for doing so.
However, I can think of two possible reasons why doctors may not want to disagree very much with the diagnoses produced by the software.
First, if the software does tend to make suggestions that raise Medicare payments, the doctors themselves will likely make more money if they agree with those suggestions.
Secondly, Clover admits that it pays personal care physicians (PCPs) $200 per visit when they use its software.
&ldquo;[T]his translates to roughly twice the traditional Medicare fees paid to PCPs for an office visit, more in line with fees paid to specialists,&rdquo; according to Clover&rsquo;s response.
I believe that PCPs could worry that&nbsp;they will lose the lucrative $200 payments if they disagree with Clover&rsquo;s software too often.
<h3>Clover Has Tremendous Potential</h3>
Seeking Alpha columnist Jhon Idrovo <a href="https://seekingalpha.com/article/4405839-clover-health-growth-quality" target="_blank">reported that Clover&rsquo;s</a> software has been able to, on average, lower seniors&rsquo; out-of-pocket costs while giving &ldquo;the substantial majority of its members&rdquo; more &ldquo;freedom of choice&rdquo; than its competitors.
Finally, the columnist noted that the company&rsquo;s membership has climbed at a compound annual growth rate of 27% since 2017, while enrollment in Medicare Advantage overall is continuing to increase quite rapidly.
Given these points, Clover&rsquo;s top and bottom lines could indeed jump tremendously in coming years, making CLOV stock a big winner for long-term investors.
<h3>The Bottom Line on CLOV Stock</h3>
Hindenburg&rsquo;s allegations against Clover seem to have some credibility. Further, I agree with the firm&rsquo;s assessment that, because of its dependence on Medicare, the insurer could face an existential risk if the government determines that it has engaged in extensive, material wrongdoing.
After all,&nbsp; the government could fairly easily eject Clover from the Medicare Advantage program, potentially dealing the company an existential blow in the process.
On the date of publication, Larry Ramer held a long position in Luckin Coffee.&nbsp;
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel&rsquo;s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.
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	</div>The post <a href="https://investorplace.com/2021/02/the-allegations-against-clover-make-clov-stock-too-risky-right-here/">The Allegations Against Clover Make CLOV Stock Too Risky Right Here</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

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