Chanos was short:
Kynikos Associates Founder Jim Chanos told CNBC on Thursday that he just closed a bet against Chinese coffee chain Luckin on Thursday after first taking a short position earlier in the year on advice from fellow short-seller Carson Block and his firm, Muddy Waters Research.
Fast forward to today, and one particularly weak point stands out: auditing procedures. Securities and Exchange Commission Chairman Jay Clayton and William Duhnke III, chairman of the Public Company Accounting Oversight Board, have often noted that U.S. regulators are prevented from inspecting audit work and practices of audit firms in China. They have called for more cooperation from China, to no avail.
All foreign companies that list on U.S. exchanges must have their financial statements audited by an independent firm. Multinational companies are generally audited by firms in their own country. This is true regardless of whether the firm listing in the U.S. is based in China, Russia, Turkey, France or anywhere else.
Luckin Coffee up 49% today