Jenny Qian Zhiya CEO of Luckin Coffee, and Charles Zhengyao Lu, non-executive chairman of Luckin Coffee, celebrate the first trade of the company's stock during the IPO at the Nasdaq Market site in NY, U.S., May 17, 2019.
Luckin sold 33 million American depositary shares on Thursday for US$17 each, after marketing 30 million shares for US$15 to US$17.
The listing values the coffee company at more than $3.9 billion, according to a Bloomberg report. A spokeswoman of the company declined to comment when contacted by TechNode on Friday. The total net proceeds of the offering and the concurrent private placement to Louis Dreyfus Company B.V. are expected to be approximately $571.2 million if the underwriters do not exercise their option and approximately $650.8 million if the underwriters exercise their option. The IPO is one of the largest this year in the United States.
The brand is banking on increased coffee consumption in China, expected to rise to 15.5 billion cups by 2023 from 8.7 billion past year, according to a report cited by Luckin in its prospectus.
Shares will trade under the ticker LK. Starbucks has more than 3,600 stores in the country.
Luckin, with a focus on convenience and affordability, is seeking to lure urban office workers who don't need the big plush spaces offered by Starbucks.
Each ADS represents eight Class A shares, the company said in a filing with the U.S. Securities and Exchange Commission last week.
While it is seen as a rival to Starbucks (SBUX), the company has a different strategy in appealing to young consumers in China, and bears major profitability issues beneath all of its exponential growth. The company reported a net loss of $241 million for 2018, on total revenue of $125 million.
The company has warned that it may continue to incur losses in the foreseeable future. It lost $82 million on revenue of $71 million during the first quarter.
Underwriting Luckin's IPO are Credit Suisse, Morgan Stanley, CICC, and Haitong International. The ADS, which are trading on Nasdaq under the symbol "LK", closed at $20.38 after rising as high as $25.96 earlier in the day.