A barista packs a coffee for online sales at a Luckin Coffee store in Beijing, China July 17, 2018.
Jason Lee | Reuters
The Chinese coffee chain opened for trading Friday at $25 per share, well above its IPO price of $17, and surged as much as 50% during its first day on the Nasdaq. But since then, the stock has fallen by more than 5%.
Luckin is trying to overtake global giant Starbucks as the biggest coffee chain in China. While the Seattle-based company opened its first store in China 20 years ago, Luckin is less than two years old. Funding from investors like BlackRock has helped the start-up expand rapidly to 2,370 stores.
The company intends to use a portion of the $561 million raised from its IPO to continue expanding across China. It’s not yet profitable, reporting a net loss of $241.3 million for 2018, and has faced some skepticism about whether it can attract customers without using its current strategy of deep discounts.