Little blue cups are cursed? Ruixing Coffee, which soared 50% on its first day of listing, fell below its issue price!

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Luckin Coffee, who has been on the market for less than a week, fell below the issue price on the evening of the 22nd Beijing time. Nasdaq-listed Luckin Coffee shares fell 4.1% to $17 a share, down 4.1%, according to the 21st Century Business report 21 Financial client.

On the evening of May 17, Luckin Coffee officially listed on NASDAQ, and its share price soared immediately after opening, with the highest share price of more than 25 US dollars on the day, surging 50%, with a market capitalization of nearly 6 billion US dollars.

At that time, the listing of the Little Blue Cup broke a number of records: the Asian company with the largest financing on Nasdaq IPO this year, the Unicorn with the fastest valuation growth, the company with the fastest IPO in the world, and so on.

As the first Chinese coffee share, the bright performance of soaring 50% on the first day of trading seems to be right in front of us, but in only four trading days, the "Little Blue Cup" is no longer in sight. So far, it is down 4% to $16.645.

Some market participants mentioned that Luckin Coffee is not very "lucky", it can be said that he was born at an untimely time, and the listing time is at the forefront of the Sino-US trade war. In addition, the group is still in a period of cash-burning expansion, and it is still uncertain when it will start to make money, especially at a time when China's economic growth is slowing.

Jim Cramer, a stock commentator for CNBC, the financial media, said on Monday that "I will never run into luck" because Chinese stocks are too risky, pointing out that of the 31 Chinese concept stocks listed in the US last year, 21 of them broke, and Luckin Coffee seemed to have the same fate as these companies, although the share price rose sharply on the first day of listing, but it was quickly sold off.

Ruixing is currently the second largest coffee chain in China by the number of stores, opening 2370 stores in less than two years and aims to overtake Starbucks, which has 3600 stores in the mainland, by the end of this year.

Ruixing plans to use the $561 million raised by IPO to continue to expand in China. But Luckin Coffee has yet to turn a profit, with a net loss of $241.3 million in 2018, and investors are sceptical about its ability to attract customers without using its current big discount strategy.

Guo Jin, co-founder and senior vice president, told the Financial Times last year that short-term profitability is not what Ruixing is after, but through a variety of marketing techniques, such as offering large discounts. in order to attract consumers and grab market share with old coffee brands.

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