A barista packs a coffee for online sales at a Luckin Coffee store in Beijing, China July 17, 2018.
Jason Lee | Reuters
Shares of Luckin Coffee fell more than 7% in morning trading Wednesday, joining the likes of Uber and Lyft by dropping below its initial public offering price days after its debut.
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.