Luckin Coffee, the "Starbucks of China", attracts investors from hedge funds

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Luckin Coffee

The stock faded shortly after its US debut in May, before gaining ground again. Two hedge funds have just revealed important holdings in the Chinese coffee chain, which aims to
Starbucks

in this country.

Luckin Coffee's US depository shares (symbol: LK) cost $ 17 each and began trading on May 17. After climbing 19.9% ​​on the first day to close at $ 20.38, Luckin's ads went back to consumption. On May 22, on the fourth day of trading, they closed at $ 14.75, 13.3% lower than the bid price, making Luckin a so-called Broken IPO. Luckin ads, however, recovered and ended Friday at $ 20.10.

Over the past week, Melvin Capital Management LP and Darsana Capital Partners have announced that they each have millions of Luckin ads.

Read more: What should Starbucks expect as Luckin grows up

Melvin Capital, which was managing $ 8.5 billion of securities traded in the United States at the end of the first quarter, has announced it holds 1.7 million Luckin ADS and purchase options to help investors. purchase an additional 800,000 Luckin ADS by May 29th. Melvin Capital has filed with the Securities and Exchange Commission. Each ADS represents 8 Luckin Class A Common Shares. On the basis of this ratio, the fund holds globally 20 million Luckin class A shares, ie 6.78% of the capital of the company.

Darsana, which managed $ 2.7 billion of securities traded in the United States at the end of March, held 2.5 million Luckin ADS and 14.4 million Luckin Class B shares on May 28. the preferred shares converted into Class B shares, each with 10 votes and convertible at any time into Class A shares, each bearing one vote. The fund holds the equivalent of 34.4 million Class A shares, representing a stake of 11.12%. Darsana did well with his first investment in Luckin. Based on the $ 20.10 closing price on Friday of the Luckin Class A Shares, the Class B shares of the Fund are valued at $ 290.2 million.

Melvin Capital and Darsana both declined to comment on their respective Luckin investments.

Write to Ed Lin at [email protected]