If you were wondering when the shares of scandal-ridden Chinese coffee company Luckin (LK) would trade again, it looks like the answer is never.
Nasdaq informed the company of its plans to delist the shares in a May 15 notice, Luckin said in a regulatory filing late Monday.
In early April, Luckin revealed it had uncovered fabricated transactions as part of an internal investigation into accounting regularities. Shares plunged more than 75% before being halted on April 6.
On May 12, Luckin announced it had fired its CEO as well as chief operating officer Jian Lu — the latter of whom had already been suspended for misconduct, along with several of his direct reports.
Luckin said in Monday’s filing that it plans to request a hearing with Nasdaq about the delisting notice. The stock will remain on Nasdaq until the hearing date, which Luckin said should take place within the next 30 to 45 days.
But it’s not looking promising for Luckin, which went public in May 2019 and initially soared on hopes that it was stealing market share from Starbucks (SBUX) in China. As of late last year the company had 3,680 stores. However, bankruptcy rumors have been swirling in light of the scandal.
Unlike the 2008 recession, the coronavirus economic downturn is not linked to a housing crisis. But there are still risks in that sector, said Federal Reserve Chairman Jerome Powell during hist testimony before the Senate Banking Committee.
For example, mortgage forbearance programs, which allow home owners to delay their monthly payments if they are affected by the pandemic, might not work as intended and people could wind up losing their homes, Powell warned.
“You also see the housing industry come under great pressure,” Powell said.
This morning, the US Census Bureau reported April figures for housing starts and building permits. Permits plunged more than 20% from March while housing starts plummeted more than 30%.
Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a virtual Senate Banking Committee hearing on Tuesday, May 19, 2020. Daniel Acker/Bloomberg/Getty Images
Arizona Senator Martha McSally criticized the Fed for hiring BlackRock to manage some of the asset-purchasing facilities the Fed built to shore up the US economy.
She falsely claimed China “unleashed this virus on America.” And although she correctly noted BlackRock holds many investments in Chinese companies, McSally incorrectly called BlackRock an “investment bank.”
In reality, BlackRock is a global asset manager, which allows investors to buy into funds that hold various assets.
McSally, a Republican who is facing a tough re-election fight against retired astronaut Mark Kelly, said the Fed needed to ensure China wasn’t profiting from “unleashing this calamity on the world.”
Federal Reserve Chairman Jerome Powell dismissed McSally’s concerns as it pertains to the Fed. He said the Fed hired BlackRock for its expertise in the markets it’s trying to buy assets from. He also noted that BlackRock, like all asset managers, holds securities from across the world — and that its Chinese holdings are irrelevant to what the Fed hired BlackRock to do.
Federal Reserve Chairman Jerome Powell defended the central banks’ program to buy junk bonds during his testimony before the Senate Banking Committee.
He flagged that the Fed allowed for buying bonds from so-called “fallen angels” — companies that have been recently downgraded from investment grade to junk — to ensure there is “no cliff” between the two lending markets, Powell said.
“We’re not buying junk bonds generally across the board at all,” he added. “We maybe have to lend money to these companies, but even better, they can borrow themselves now.”
Federal Reserve Chairman Jerome Powell said the central bank’s new Municipal Lending Facility is about two week’s away from being operational.
The program is designed to lend up to $500 billion in loans and $35 billion in credit protection to help states and local governments through the coronavirus recession.
Wall Street just got the six words it was waiting to hear from Federal Reserve Chairman Jerome Powell: “We may have to do more.”
Stocks rallied Monday after Powell told CBS’