NEW YORK (AP) — Shares of Luckin Coffee, a fast-growing rival to Starbucks in China, rose 20% in their U.S. stock market debut Friday.
The Chinese company, which opened its first store in Beijing less than two years ago, has 2,370 locations and plans to surpass the 3,700 stores Starbucks has in China by the end of the year.
But unlike Starbucks, Luckin is losing money.
It brought in $125 million in revenue last year, but spent much more than that on coffee beans, store rent and other costs. Last year, it lost $475 million.
Most of Luckin's stores are small, have few seats and are used mainly as a place to pick up mobile orders. It also offers delivery in 30 minutes and promises a refund for delays or spilled drinks. Through its app, customers can watch their coffee being made after making an order.
Luckin raised $561 million in its initial public offering Friday by selling 33 million American depositary shares at $17 apiece. The ADS, which are trading on Nasdaq under the symbol "LK," closed at $20.38 after rising as high as $25.96 earlier in the day.
Before you consider Starbucks, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Starbucks wasn't on the list.
While Starbucks currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Which stocks are major institutional investors including hedge funds and endowments buying in today's market? Click the link below and we'll send you MarketBeat's list of thirteen stocks that institutional investors are buying up as quickly as they can.
Get This Free Report
