NEW YORK -- Luckin Coffee will stop trading on the Nasdaq Stock Market on Monday, the company announced Friday, after it dropped a bid to appeal the exchange's delisting decision.
Luckin has decided "not to seek to reverse" Nasdaq's decision for it to delist, the Xiamen, China-based company said in a statement, nearly three months after disclosing $310 million in fabricated sales.
On Wednesday, Luckin withdrew its request for a hearing with the New York bourse to repeal the delisting decision, originally scheduled for Thursday, the company said.
The Luckin scandal gave impetus to a move by Washington to restrict Chinese companies' access to U.S. capital markets, with delisting as an option. Mainland tech giants including Nasdaq-traded JD.com and NetEase have pursued secondary listings in recent weeks in Hong Kong, which would help hedge such risks.
Luckin, currently under investigation by Chinese authorities, commanded a market capitalization of $12 billion at one point. Much of that value has evaporated, leaving the company's worth less than $360 million on Friday -- 13 months after it went public.
Often dubbed China's Starbucks challenger, the homegrown coffee chain captured the imagination of investors including the likes of BlackRock with its high-growth story.
In 2018, its first full year of operation, the company reported a revenue of $125 million. Its financial disclosures and guidance pegged 2019 sales at around $732 million, a nearly 500% jump on the year. Nearly half of that turned out to be fabricated.
Last month, the U.S. Senate overwhelmingly passed a legislation which would delist Chinese companies that are out of compliance with American accounting rules after three years.
Beijing has restricted the U.S. Public Company Accounting Oversight Board's access to mainland companies' audit documentation, which it relies on to protect investors.
U.S. President Donald Trump said last month that his administration is studying "differing practices of Chinese companies listed on the U.S. financial markets."
Meanwhile, Chinese companies have successfully listed in the U.S. since the Luckin scandal.
These include Agora Inc., a Shanghai-based software company which started trading on Nasdaq Friday, after raising $350 million in its initial public offering. The startup priced its IPO at $20 per American depositary share, $2 above the upper limit of its expected range -- a sign of great investor appetite.
