Proceedings of the 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021)

The Impact of Luckin Coffee’s Negative News on Its Stock Price and the Financial Market

Authors
Chak ho Chau
Corresponding Author
Chak ho Chau
Available Online 22 March 2021.
DOI
https://doi.org/10.2991/aebmr.k.210319.083How to use a DOI?
Keywords
Financial news, Luckin Coffee, stock price
Abstract

Past studies have found that financial news has a relationship with stock prices. Bad news has negative impact on stock prices, but the type of bad news also matters. When a stock is shocked by a natural disaster, a dip of its stock price is only temporary; when it is shocked by a scandal event, such dip can be permanent and severe. Depending on the type of news, investors have different trading strategies; they may choose to hold the stocks that are shocked by a natural disaster and sell the stocks that are shocked by a scandal event. This paper focuses on the impacts of Luckin Coffee’s scandal event on April 2020 and the outbreak of COVID-19 on March on its stock price, its top competitor Starbucks’ stock price, and on the Nasdaq index. I collected stock prices of Luckin Coffee, Starbucks, and Nasdaq index from Yahoo! Finance from July 2019 to July 2020. By using regression analysis, the result shows that though the scandal event affected Luckin Coffee’s stock price severely, causing it to be in an irreversible situation, the impacts on Starbucks and Nasdaq are limited; the dip shown in Starbucks and Nasdaq on March is just due to the hit by the global pandemic, COVID-19.

Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

Volume Title
Proceedings of the 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
22 March 2021
ISBN
978-94-6239-354-7
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.210319.083How to use a DOI?
Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Chak ho Chau
PY  - 2021
DA  - 2021/03/22
TI  - The Impact of Luckin Coffee’s Negative News on Its Stock Price and the Financial Market
BT  - Proceedings of the 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021)
PB  - Atlantis Press
SP  - 454
EP  - 459
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210319.083
DO  - https://doi.org/10.2991/aebmr.k.210319.083
ID  - Chau2021
ER  -