Luckin’s stock was also powered upward by a company report earlier this week that its sales in the third quarter soared to $208.9 million, an increase of 558% from a year earlier. Luckin by the end of the third quarter had 3,680 stores compared with 1,189 a year earlier.
Friday’s stock surge left Luckin’s market cap at $6.4 billion, and the fortune of chairman Charles Lu (also known as Charles Zhengyao Lu or Lu Zhengyao) worth an estimated $2.26 billion. Lu’s assets also include stakes in auto-related businesses. The big increase in Luckin’s shares on Friday also turned Luckin’s CEO Jenny Zhiya Qian into a billionaire, with a holding worth $1.06 billion. Lu ranked No. 194 with a fortune on the 2019 Forbes China Rich List earlier this month (see overview here). China is second only to the United States as home to the world’s largest number of billionaires.
Lu’s and Qian’s fast-rising wealth compares with a fortune of $4.2 billion for Howard Schulz, Starbucks’ iconic founder and former chairman. Shares in Luckin, which was founded in only 2017 and is headquartered in the southeastern Chinese city of Xiamen, have now climbed more than 59% since the company went public in May this year at a price of $17 a share.
To be sure, Luckin still has a long way to go overall in matching Starbucks, whose market cap of nearly $100 billion and global presence tower above Luckin’s. Luckin is also struggling to make money – its loss widened in the third quarter to $82 million (see details here).
Yet there’s no denying that Luckin is making waves in the coffee and tea business in a key market for Starbucks, and the U.S. company is up against a spirited rival that wasn’t on the map not long ago.
Perhaps the same can be said these days for the overall U.S.-China relationship.