- Shares of Luckin Coffee surged as much as 50% Friday morning in the Chinese up-start retailer’s Nasdaq debut.
The opening trade under the symbol LK was $25 per share. On Thursday night, Luckin priced its initial public offering at $17 per share, for an implied market value of roughly $4 billion. The Beijing-based chain also boosted its IPO to 33 million shares, 3 million more than initially planned. Its IPO price was on the high end of its expected range of $15 to $17 per share.
Shares closed Friday afternoon up 20% at $20.38 per share, giving the stock a market value of $5.6 billion.
Luckin is trying to overtake Starbucks as the biggest coffee chain in China. Since it was founded less than two years ago, it has opened 2,370 stores and plans to add 2,500 this year alone. Roughly 90% of its stores are smaller format shops designed for easy pickup and proximity to its customers, in contrast to Starbucks’ larger and more homey cafes. Starbucks is celebrating its 20th anniversary in China this year.
“We have done what most people do in 15 or 20 years,” Luckin CFO Reinout Schakel said Friday on CNBC’s “Squawk Box ” ahead of the start of trading.
Coffee sales in China are expected to reach $8.2 billion this year, growing annually by 11.3% over the next five years, according to Statista. But tea still remains the top drink for Chinese consumers. Luckin is also trying to reach tea drinkers with trendy beverages, like fruit teas topped with cream cheese.