Discuss the Reason Why Luckin Coffee and Wirecard Face Different Market Outcomes Despite Both Engaging in Financial Fraud

Research Article
Open access

Discuss the Reason Why Luckin Coffee and Wirecard Face Different Market Outcomes Despite Both Engaging in Financial Fraud

Hongji Li 1*
  • 1 University of Toronto    
  • *corresponding author hjluke.li@mail.utoronto.ca
AEMPS Vol.187
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-173-0
ISBN (Online): 978-1-80590-174-7

Abstract

Financial fraud is a major challenge in the capital market. This study used case study methods through the collection of market data, the introduction of financial theory, and the collation and analysis of relevant literature to explore why Luckin Coffee and Wirecard both faced financial fraud scandals, but in the end, Luckin Coffee came back to life while Wirecard quickly went bankrupt. The main reason for comparing the companies is that the scandals of the two companies were exposed at a similar time, during the COVID-19 pandemic, which has led to uncertainty in the global economic environment. In addition, with the increasing supervision of companies in today's market and society, the different fates of the two companies are even more significant. The research results are diverse, and the reasons are not single. Different levels of fraud and whether to build investor confidence directly determine the future of the company. More practical operating models, proactive regulation, and transparent management will give companies more opportunities to recover from fraud. The differences in the four perspectives of the two companies' fraud, regulators, investors, and internal companies led to their different fates.

Keywords:

Financial Fraud, Financing, Case Study

Li,H. (2025). Discuss the Reason Why Luckin Coffee and Wirecard Face Different Market Outcomes Despite Both Engaging in Financial Fraud. Advances in Economics, Management and Political Sciences,187,68-73.
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References

[1]. What is financial fraud- MBA Think Tank Q&A home page. (n.d.). https://www.mbalib.com/ask/question-f5389c7f6fbd63c2bb5810297fd15f40.html

[2]. U.S. Securities and Exchange Commission (SEC). (2020). SEC Charges Luckin Coffee with Accounting Fraud. Retrieved from https://www.sec.gov/news/press-release/2020-319

[3]. Zhe Peng a b 1, a, b, 1, c, 2, d, 3, Coffee, A., BoehmerE., EngelbergJ.E., EvansJ., HeH., JamesS.D., KolariJ.W., LiuL.Y., ZhangB., ZhangC.X., AngA., … JianB. (2022, January 29). The Luckin Coffee scandal and short-selling attacks. Journal of Behavioral and Experimental Finance. https://www.sciencedirect.com/science/article/abs/pii/S221463502200003X

[4]. Storbeck, Olaf; Dombey, Daniel (16 November 2020). "Santander buys Wirecard's core European business for €100m". Financial Times. Archived from the original on 10 December 2022. Retrieved 17 November 2020.

[5]. Luckin Coffee Inc. (2020). Annual Report 2020. Retrieved from https://investor.luckincoffee.com/news-releases/news-release-details/luckin-coffee-files-annual-report-fiscal-2020

[6]. Wirecard. (2020, June 22). Statement of the Management Board about the Current Situation of the Company. Retrieved from https://www.wirecard.com/company/press-releases/wirecard-ag-statement-of-the-management-board-about-the-current-situation-of-the-company

[7]. McCrum, D. (2020, June 25). Wirecard: the timeline Financial Times. Retrieved from https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b36868db

[8]. Christopher Thompson. Breakingviews - breakingviews - wirecard could prove a nail in BAFin’s coffin. (n.d.). https://www.reuters.com/article/breakingviews/breakingviews-wirecard-could-prove-a-nail-in-bafins-coffin-idUSKBN23T1DU/

[9]. Valinsky, J. (2021, February 5). Luckin Coffee files for bankruptcy in the US. CNN Business. Retrieved from https://www.cnn.com/2021/02/05/investing/luckin-coffee-us-bankruptcy-trnd/index.html

[10]. Valinsky, J. (2021, February 5). Luckin Coffee files for bankruptcy in the US. CNN Business. Retrieved from https://www.cnn.com/2021/02/05/investing/luckin-coffee-us-bankruptcy-trnd/index.html

[11]. Smith, T. (n.d.). What is market sentiment? Definition, indicator types, and examples. Investopedia. https://www.investopedia.com/terms/m/marketsentiment.asp

Cite this article

Li,H. (2025). Discuss the Reason Why Luckin Coffee and Wirecard Face Different Market Outcomes Despite Both Engaging in Financial Fraud. Advances in Economics, Management and Political Sciences,187,68-73.

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About volume

Volume title: Proceedings of ICMRED 2025 Symposium: Effective Communication as a Powerful Management Tool

ISBN：978-1-80590-173-0(Print) / 978-1-80590-174-7(Online)
Editor：Lukáš Vartiak
Conference website: https://2025.icmred.org/Bratislava.html
Conference date: 30 May 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.187
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. What is financial fraud- MBA Think Tank Q&A home page. (n.d.). https://www.mbalib.com/ask/question-f5389c7f6fbd63c2bb5810297fd15f40.html

[2]. U.S. Securities and Exchange Commission (SEC). (2020). SEC Charges Luckin Coffee with Accounting Fraud. Retrieved from https://www.sec.gov/news/press-release/2020-319

[3]. Zhe Peng a b 1, a, b, 1, c, 2, d, 3, Coffee, A., BoehmerE., EngelbergJ.E., EvansJ., HeH., JamesS.D., KolariJ.W., LiuL.Y., ZhangB., ZhangC.X., AngA., … JianB. (2022, January 29). The Luckin Coffee scandal and short-selling attacks. Journal of Behavioral and Experimental Finance. https://www.sciencedirect.com/science/article/abs/pii/S221463502200003X

[4]. Storbeck, Olaf; Dombey, Daniel (16 November 2020). "Santander buys Wirecard's core European business for €100m". Financial Times. Archived from the original on 10 December 2022. Retrieved 17 November 2020.

[5]. Luckin Coffee Inc. (2020). Annual Report 2020. Retrieved from https://investor.luckincoffee.com/news-releases/news-release-details/luckin-coffee-files-annual-report-fiscal-2020

[6]. Wirecard. (2020, June 22). Statement of the Management Board about the Current Situation of the Company. Retrieved from https://www.wirecard.com/company/press-releases/wirecard-ag-statement-of-the-management-board-about-the-current-situation-of-the-company

[7]. McCrum, D. (2020, June 25). Wirecard: the timeline Financial Times. Retrieved from https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b36868db

[8]. Christopher Thompson. Breakingviews - breakingviews - wirecard could prove a nail in BAFin’s coffin. (n.d.). https://www.reuters.com/article/breakingviews/breakingviews-wirecard-could-prove-a-nail-in-bafins-coffin-idUSKBN23T1DU/

[9]. Valinsky, J. (2021, February 5). Luckin Coffee files for bankruptcy in the US. CNN Business. Retrieved from https://www.cnn.com/2021/02/05/investing/luckin-coffee-us-bankruptcy-trnd/index.html

[10]. Valinsky, J. (2021, February 5). Luckin Coffee files for bankruptcy in the US. CNN Business. Retrieved from https://www.cnn.com/2021/02/05/investing/luckin-coffee-us-bankruptcy-trnd/index.html

[11]. Smith, T. (n.d.). What is market sentiment? Definition, indicator types, and examples. Investopedia. https://www.investopedia.com/terms/m/marketsentiment.asp

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