Shares of China-based coffee chain Luckin Coffee (LK) rose sharply in their trading debut Friday on the Nasdaq Stock Market, well above the initial public offering price of $17.
At last check, the stock was jumping 25.1% to $21.27. The first trade for Luckin Coffee was $25.
The Xiamen-based company last week filed for an initial public offering of 33 million shares at an expected range of between $15 and $17 a share.
Established in 2017 and dubbed the “Starbucks of China,” Luckin is the second-biggest coffee chain in China after Starbucks. As of March, it had opened 2,370 stores – mostly in office buildings – across 28 cities, and sold 90 million cups of coffee to more than 16.8 million customers.
The taste is not so good.
Maybe my expectation is too high�� #luckincoffee #china pic.twitter.com/ro8Z2qfAfI
— Sinee (@Sinee96637123) May 15, 2019
The company is aiming to have 4,500 stores throughout the country by the end of this year, surpassing Starbucks, which has 3,600 branches on the streets of 150 Chinese cities two decades after it arrived in China.
The listing is one of the biggest by a mainland Chinese company in the U.S. this year. Analysts and investors are skeptical of the its prospects, however, given the overwhelming dominance of tea as the preferred hot beverage of choice among Chinese consumers.
Luckin has already raised some $550 million from investors that include the U.S. private-equity group BlackRock (BK – Get Report) and Singapore’s sovereign wealth fund GIC.