Luckin Coffee Stock (NASDAQ: LK) plunged shortly after listing in the US IPO (IPO) in May, and then rebounded. The two hedge funds have just disclosed information that they hold a large stake in the Chinese coffee chain, whose goal is to replace Starbucks (NASADQ: SBUX) in the Chinese market.
As of press time, Luckin Coffee Stock price rose 7.4% in the US stock market trading on Friday morning to US$21.61.
The IPO of Luckin Coffee American Depositary Shares is priced at US$17 per share. The stock has been listed on May 17. IPO's share price soared 19.9% on the first day to close at US$20.38, then fell back to US$10 to 19 at the middle section of the dollar range. As of May 22, the fourth trading day after the IPO was listed, the stock closed at $14.75, down 13.3% from the issue price. However, Luckin Coffee's share price rebounded and closed at $20.10 last Friday.
In the past week, investment companies Melvin Capital Management LP and Darsana Capital Partners have disclosed that the two funds each hold millions of shares of Swiss-owned coffee depository.
As of the end of the first quarter, Melvin Capital managed $8.5 billion worth of securities traded in the United States. Melvin Capital recently disclosed that as of May 29, the fund held 1.7 million shares of Luckin Coffee American Depositary Shares and held call options that could buy 800,000 shares of Luckin Coffee American Depositary Shares. Melvin Capital disclosed this information in a form file submitted to the Securities and Exchange Commission (SEC). The American Depositary Shares (ADS) per share of Luckin Coffee represents 8 Class A common shares. According to this ratio, the fund has 20 million shares of Luckin Coffee Stock of Class A common stock, with a shareholding ratio of 6.78%.
As of the end of March, Darsana managed $2.7 billion worth of securities traded in the United States. Darsana recently disclosed that as of May 28, the fund held 2.5 million shares of Luckin Coffee American Depositary Shares and 14.4 million Class B common stocks. Darsana invested in Luckin Coffee before spending $25 million to buy a preferred stock of the latter. These preferred stocks have been converted into Class B common stock, with 10 votes for each Class B common stock. At any time, it can be converted into Class A common shares with 1 vote each. The fund's holdings of Luckin Coffee American Depositary Shares and Class B common stock are equivalent to 34.4 million Class A common shares, with a shareholding ratio of 11.12%. Darsana's early investment in Luckin Coffee performed well.
Based on the closing price of Luckin Coffee Stock on Friday at $20.10, the total value of Class B common stock held by the fund was $290.2 million.
Both Melvin Capital and Darsana declined to comment on their respective investments in Luckin Coffee Stock.
Stay tuned to Luckin Coffee Stock!
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