How A Ride-Hailing Driver Comes To Dominate The World? [EN]: Chapter 586

Financial fraud has been confirmed, and there’s basically no solution.

If this were in the A-share market [China’s mainland stock exchanges], it would likely result in public criticism, with a few people severely punished by being barred from the capital market for a few years, and a negligible fine of 600,000 yuan would be imposed.

However, the US stock market is different. Financial fraud not only requires compensating investors for huge losses but almost certainly leads to delisting.

Lu Yaodong is completely clueless now; he doesn’t know how to solve the current problem.

“I… haha… to be honest, I’m ashamed to say I really don’t know what to do. So, I brought our executives and major shareholders, hoping to hear your advice, Mr. Yang,” Lu Yaodong said shamelessly.

He’s trying to pass the problem to Yang Chen, hoping he’ll solve it for them.

But that’s normal; they can’t possibly solve such a big problem on their own.

Yang Chen: “Since their short-selling focuses on ‘400 items sold per store per day, at a unit price of 16.7 yuan, with a profit margin of 28.4%’, we can only make this a solid fact to counter their short-selling report.”

Lu Yaodong: “Alas… Mr. Yang, you don’t understand this industry. In our Dragon Country [China], the number of people who insist on drinking coffee every day is relatively small compared to the total population. Some of them also prefer brands like Starbucks, so there aren’t many true Luckin customers. It’s impossible to guarantee that each store can sell 400 items per day at an average price of 16.7 yuan. I can say with certainty that no type of coffee in the world can meet this requirement. Even if high-end coffee is deliberately sold at a loss for a dozen yuan, it won’t work because many people don’t understand coffee at all. We say we’re selling at a loss, but they don’t believe it, and we can’t attract customers.”

Yang Chen: “Since you know you can’t achieve this data, why did you commit fraud? Didn’t you think about this day when you were committing fraud?”

Lu Yaodong didn’t dare to speak, and other shareholder representatives expressed their anger to Lu Yaodong.

“We were deceived by you to invest so much money. If the company is forced to delist, we will suffer heavy losses and will definitely make you compensate us.”

“I reminded you a long time ago that the US is much stricter than our country. Once fraud is discovered, there’s almost only one way to go: delisting. The relevant responsible persons may also be sentenced to prison. Chairman Lu and the executives repeatedly assured me that there was absolutely no fraud and that all data were true and valid. Is this what you call true and valid?”

“Although the urgent task is to solve the problem, I still want to ask Chairman Lu and the executives how many things are fake and how much is being concealed from us. We hope Chairman Lu and the executives can tell us the truth.”

…

Lu Yaodong: “The shareholders’ criticism is correct. I am indeed responsible and bear the greatest responsibility. If we can solve the problem smoothly this time, I am willing to sell my shares and withdraw from Luckin.”

This guy wants to play the “golden cicada shedding its skin” trick again [a Chinese idiom referring to escaping danger by leaving behind a decoy]. He’s played this trick on several other listed companies before, first trying to drive up the stock price, and then reducing his holdings or even clearing his position and leaving the market when a crisis is about to erupt.

However, this is also good. Yang Chen can take this opportunity to control Luckin Coffee.

2）Coffee and Moutai: What a Combination?_What’s Wrong with a Ride-Hailing Driver Having Some Money?

, and it will be more convenient to drink coffee in the future.

“Okay! Jin Ming, have someone send the equity transfer agreement over. Not just Chairman Lu, but other shareholders who want to sell their holdings can also sell to me. I’ll calculate based on the price before Wall Street took action, 12.5 US dollars per share. You take the money and leave, and I’ll clean up the mess,” Yang Chen said.

Jin Ming nodded and immediately called the assistant to send the equity transfer agreement over.

Lu Yaodong: “Haha… Thank you, Mr. Yang. How about this, I’ll treat you to this meal today as a thank you for your help in this difficult time.”

Other shareholders also quickly echoed, thanking Yang Chen for acquiring their shares at this time.

The reason why they are so eager to sell their shares is that with their wisdom, they can’t think of any way to break the situation.

Even if Yang Chen buys all the shares being sold, Luckin is destined to be delisted.

Once delisted, it will be difficult for shareholders to cash out.

So, they should take advantage of the present moment to sell their shares to Yang Chen, so they don’t have to worry about Luckin’s survival.

While everyone was eating, the equity transfer agreement arrived.

Lu Yaodong and others immediately signed it, promising to transfer their holdings to Starlight Investment and Yang Chen personally.

After the meal, Lu Yaodong and others happily left.

Jin Ming sent people to follow Lu Yaodong and others back to Xiamen to assist them in the equity change and other matters immediately.

After making arrangements, Jin Ming came to the Luckin Coffee store to report back to Yang Chen, who was drinking coffee and trying to figure out a solution.

Jin Ming: “Mr. Yang, the arrangements have been made. But… what should we do now? To be honest, I wanted to stop you, but I also felt that you are the boss, and I shouldn’t overstep my authority. But I really can’t think of a way to save Luckin Coffee. Whether from an operational or capital market perspective, this is a dead end, and no one can break it. As Lu Yaodong said, even if we buy the most high-end coffee and sell it for 9.9 yuan with free shipping, it won’t solve the problem. Because most people in Dragon Country [China] don’t drink coffee, they can’t tell the difference between good and bad coffee, and no matter how much we promote it, it’s useless. Besides, it doesn’t make sense for us to invest too much money and lose money to boost performance for a Luckin Coffee. What do you think?”

Yang Chen: “I said, Luckin’s survival itself is not important. The key is that this is our first battle with Wall Street, and we must not lose. Other Dragon concept stocks [Chinese companies listed on US stock exchanges] are watching. Once we can’t save Luckin, other Dragon concept stocks will be sold off. Those Wall Street guys have already prepared short positions, just waiting for Dragon concept stocks to collectively sell off and profit. So, we must rescue Luckin no matter what.”

Jin Ming: “Alas… there’s no way to use the capital market anymore. We can only start from the operational side.”

As the two were talking, the store clerk who was soliciting customers at the door got into an argument with passersby.

Because Luckin’s scandal led to a sharp decline in customer traffic, the store manager asked the clerk to go out and solicit customers.

Just now, a few drunk guys passed by. The waiter went up to hand out flyers to solicit customers, but they laughed and said, “Even dogs don’t drink Luckin Coffee.” The clerk must have been unhappy and started arguing with them.

“Who the hell drinks such low-end coffee! If I’m going to drink, I’ll drink Starbucks!”

“Who drinks this stuff? Is it as good as Moutai [a premium Chinese liquor]?”

“Haha…”

“It’s not good to drink in the first place, and now it’s being besieged by Wall Street. Delisting

3）Coffee and Moutai: What a Combination?_What’s Wrong with a Ride-Hailing Driver Having Some Money?

is a certainty. You won’t let people talk about it!”

“Sister, it’s not impossible for me to drink your coffee, unless you add Moutai to the coffee.”

“Haha…”

“Hey, hey, hey, don’t hit people in the face. If they had that ability, why would they sell coffee? They would just switch to selling Moutai.”

“Haha…”

Yang Chen had a flash of inspiration and thought of a way to break the situation.

“I’ve got it! Jin Ming, immediately notify Luckin’s production plant in Ning Province and tell their 负责人 [zhuren, person in charge] to take the R&D and production technicians to Moutai Group. We’ll buy tickets and go there now,” Yang Chen ordered.

Jin Ming nodded and quickly asked someone to check the contact information, notify the Ning Province factory, and buy tickets for Yang Chen and Jin Ming to go to Guizhou Province.

Yang Chen walked out of the store with a smile and said to the waiter, “Don’t do these useless things for now. Just do your job well in the store. Everyone, the Moutai with coffee you want will be available soon, so remember to support it.”

After speaking, Yang Chen left in a hurry with Jin Ming.

The few guys looked confused and discussed among themselves.

“Who is he?”

“I don’t know! He’s out of his mind. I was just saying it casually, and he really wants to add Moutai to coffee? What’s he thinking?”

“Haha… Who does he think he is? Moutai has such a high status, how could they allow adding Moutai to coffee for sale? They’ll sue him to death!”

…

As soon as Yang Chen got into the car, Ding Dajun, chairman of Moutai Group, called.

After Ding Dajun identified himself, Yang Chen said with a smile, “What a coincidence, I’ve already asked someone to buy plane tickets and I’m on my way there. I’ll go to the group to see you at 9:00 AM tomorrow. Also, please have Chairman Ding gather some R&D and production personnel to wait, I’ll need them tomorrow.”

Ding Dajun: “Okay! Does Mr. Yang have any ideas?”

Yang Chen: “I think ‘the first cup of Moutai for young people’ should be born. Let’s talk about it when we meet tomorrow.”

Hanging up the phone, Ding Dajun looked puzzled.

“The first cup of Moutai for young people, this is a goal that the group really wants to achieve. But objective factors have caused Moutai prices to remain high, and young people can’t afford it. What can Mr. Yang do to make this goal a reality?” Ding Dajun said to himself.

Moutai’s position in Dragon Country [China] is self-evident, and it’s no exaggeration to say that it’s a hard currency.

However, this situation has also caused a series of consequences.

For example, everyone believes that Moutai cannot be cheap, and it should sell for more than a thousand, three thousand, or even more.

If Moutai Group dares to lower prices, what will be the consequences?

Distributors will disagree. Lowering prices means reduced profits, and they will definitely be the first to object. Moutai needs to rely on these net sales to open up sales channels, so naturally, they dare not offend them.

People who collect or even hoard Moutai will disagree. Lowering prices means that the value of their Moutai will decrease.

Rich people and government officials will also disagree. Drinking Feitian Moutai [a specific type of Moutai] for more than a thousand or even three thousand yuan is a symbol of status, but can drinking Feitian Moutai for a few hundred yuan still reflect their status?

Finally, the country will not agree.

Moutai is used at every state banquet. If it really drops to three or five hundred yuan a bottle, it can’t be used to entertain foreign guests.

So,

4）Coffee and Moutai: What a Combination?_What’s Wrong with a Ride-Hailing Driver Having Some Money?

This is equivalent to price kidnapping Moutai Group’s business strategy, and they can only bite the bullet and earn a 50% profit margin.

But after all, there are more poor people in this world, especially young people who don’t drink Moutai, so this vast market has never been able to be involved, and Moutai Group is also uncomfortable.

Therefore, people have been shouting the slogan “the first cup of Moutai for young people” for several years, but this slogan has been difficult to achieve.

Now that Yang Chen says “the first cup of Moutai for young people” should be born, Ding Dajun is really looking forward to what he can come up with.

Because Yang Chen’s side did not take any counterattacks against Wall Street, after the US stock market opened at night, Luckin Coffee’s stock price fell sharply again, directly falling below 米金/股 [mi jin/gu, USD/share].

Driven by Luckin Coffee, all Dragon concept stocks [Chinese companies listed on US stock exchanges] collectively fell.

At this time, Luckin Coffee issued an announcement.

The content can be simply summarized as “Yang Chen and Starlight Investment acquired the shares of Chairman Lu Yaodong and many other shareholders. Currently, Yang Chen and Starlight Investment hold a total of 68% of Luckin Coffee’s equity, and Yang Chen has become the actual controller.”

As soon as this announcement was issued, the stock prices of Luckin Coffee and other Dragon concept stocks began to rebound.

However, these stocks only rebounded a little, and then fell again.

Because everyone knows that Yang Chen becoming the controlling shareholder of Luckin cannot change the fact that Luckin is faking data. Once this fraud is confirmed, Luckin Coffee will definitely be delisted from the US stock market.

So, run away now, otherwise, you won’t be able to run away when the delisting notice from the US Securities Regulatory Department is issued.

Early in the morning, major financial media reported on Yang Chen’s acquisition of Luckin Coffee and Moutai.

Today’s Finance: After Wall Street declared war on Boss Yang and Dragon concept stocks [Chinese companies listed on US stock exchanges], after three months of efforts, it finally issued the first short-selling report. Luckin Coffee was unfortunately the unlucky one. Just when everyone was expecting how Boss Yang would fight back, he first spent trillions to acquire 10% of the shares of Moutai Group, and then acquired 68% of the shares of Luckin Coffee, becoming the actual controller of the company. We can’t help but ask what Boss Yang wants to do? Acquiring Luckin Coffee’s equity can still be understood as boosting the stock price. But what is the purpose of acquiring Moutai’s equity?

Tonghuashun Finance: After falling 40% yesterday, Luckin Coffee’s stock price fell again by more than 30% today. Fortunately, Boss Yang took action and took out real money to support Luckin Coffee’s stock price. Although this cannot solve Luckin’s crisis, it is somewhat useful. It’s just that he took a step to acquire Moutai’s equity before acquiring Luckin Coffee’s equity, which is really puzzling. It stands to reason that he urgently needs a lot of funds to support the Dragon concept stocks [Chinese companies listed on US stock exchanges] with a total market value of 1.2 trillion US dollars, so why did he spend trillions to buy Moutai first? Tonghuashun Finance will continue to follow up and report, so please pay attention to subsequent reports.

…

Financial V [verified account] Xu Zeping: I didn’t want to express my opinion, but I saw many fans leaving messages asking me to talk about my evaluation of Boss Yang’s operation. Let me state first that I absolutely respect Boss Yang and have no disrespect. But I really don’t understand what the significance of the two steps he has taken is. First of all, taking real money to protect Luckin

5）Coffee and Moutai: What a Combination?_What’s Wrong with a Ride-Hailing Driver Having Some Money?

In theory, the disk can indeed slow down the downward trend of the stock price. But that is the US stock market, not our A-share market [China’s mainland stock exchanges]. In the A-share market, a fine or something will pass, but in the US, financial fraud is severely punished by delisting. Boss Yang spent money to buy the controlling stake in Ruixin Coffee, which cannot solve the fundamental problem and still cannot avoid the ending of Ruixin’s delisting. If Ruixin is delisted, then Dragon concept stocks [Chinese companies listed on US stock exchanges] will definitely collectively sell off, and Wall Street can sit and count the money. So, I really didn’t understand this step. Boss Yang’s knowledge should not be able to understand these problems. As for Moutai, I am more willing to believe that Boss Yang purely wants to invest and has nothing to do with fighting back against Wall Street. Let’s wait and see whether what I said is right, or whether Boss Yang is in the atmosphere, causing me to not understand.

Famous stock commentator Li Daxiao: Many fans left messages asking me to evaluate Boss Yang’s operation. I can only say that I am not worthy to evaluate Boss Yang’s operation. From my limited knowledge, I really cannot understand the significance of the two steps he took. However, this may be the gap between me and Boss Yang. If I can understand Boss Yang’s operation, I will not be a stock commentator, but a richest man. Although I don’t understand Boss Yang’s operation, I believe that with his wisdom, he will definitely not take these two steps randomly. Let’s wait and see, I believe Boss Yang will give us surprises.

On the other side, Wall Street giants, led by the Lion Fund, are holding video conferences and reveling in the middle of the night.

“It seems that Yang Chen is not as powerful as the legend says, he is also very ordinary.”

“The three months we spent were worth it. We hit the mark in one fell swoop, and he has no ability to resist at all.”

“He actually spent a lot of money to buy 68% of the shares of Luckin Coffee, haha… He thought this was the Dragon Country [China] stock market, and he could solve the problem as long as he was willing to spend money? This time, let him have a good understanding of what a reasonable and legal stock market is, not the kind of family stock market in Dragon Country [China].”

“It seems that our subsequent preparations are likely to be useless. A Luckin is enough to bring down Dragon concept stocks [Chinese companies listed on US stock exchanges] and Yang Chen.”

…

At this time, Yang Chen was visiting Moutai’s production line accompanied by Ding Dajun, chairman of Moutai.

Not long after, they came to the Jiuqu production area, which instantly brightened Yang Chen’s eyes, because in front of him were rows of young girls stepping on Jiuqu [the process of making Jiuqu, a key ingredient in Moutai], with bare feet.

Ding Dajun: “Haha… Mr. Yang, you must have never seen this before, right?”

Yang Chen: “I used to see news about Moutai girls stepping on Jiuqu on the Internet. I thought it was a joke.”

Ding Dajun: “Haha… In fact, we have also tried to replace manual stepping on Jiuqu with machines before, but the taste of the wine made is not comparable to that of manual labor. Therefore, we can only use manual stepping on Jiuqu again.”

Yang Chen: “Haha… The same is “foot massage”, Moutai still understands people’s psychology better than old altar sauerkraut [a type of pickled cabbage]. If old altar sauerkraut also uses such girls to step on sauerkraut, I guarantee that no one will object, and everyone will definitely buy it happily.”

Ding Dajun: “Haha… The price of sauerkraut is too low, they can’t afford to hire such girls to step on it. Our gross profit is as high as 90%, which allows us to play like this. There is also a lot of attention to our use of girls to step on Jiuqu. After years of experience, we have found that a weight of about 120 pounds is the most suitable

6）Coffee and Moutai: What a Combination?_What’s Wrong with a Ride-Hailing Driver Having Some Money?

. If you use men, the weight will definitely be higher than this number. And men are relatively less hygienic. Therefore, our use of girls to step on Jiuqu has scientific and hygienic basis, it is not that we are doing some erotic side business.”

Yang Chen: “Oh, I see. Let’s go, let’s find a place to talk.”

Ding Dajun: “Then let’s go to the conference room. Let’s go.”

Yang Chen followed Ding Dajun to the conference room. Representatives of researchers and production personnel from Luckin Coffee’s Ning Province factory also came. Ding Dajun also called Moutai’s research and production personnel according to Yang Chen’s request.

Ding Dajun: “Let me introduce to you, this is Mr. Yang Chen, the boss of the Starlight Department who has only heard of his name but has never seen him. Everyone is welcome!”

“Clap clap clap…”

Yang Chen: “Haha… Thank you everyone, thank you everyone. Everyone is welcome, please sit down.”

Ding Dajun: “Everyone, please sit down. I am very happy that Mr. Yang can become the second largest shareholder of our Moutai Group, and also the largest natural person shareholder. I am also very honored that Mr. Yang can come to our Moutai Group to visit. Now everyone welcomes Mr. Yang to say a few words.”

“Clap clap clap…”

Yang Chen stood up with a smile and said, “Thank you. I am very honored to be a shareholder of Moutai Group, and I am also very happy to visit Moutai Group. After this tour, it has indeed increased my knowledge a lot. Especially the girl stepping on Jiuqu that Chairman Ding just introduced, it really opened my eyes. Everyone has also seen that I also brought researchers and production personnel from the Luckin Coffee factory. I think everyone also knows about Wall Street’s siege of Dragon concept stocks [Chinese companies listed on US stock exchanges]. Currently, the first company they are shorting is Luckin Coffee. This is my first battle with them, and I must not lose no matter what. Once this battle is lost, there is basically no need to fight the follow-up, and Wall Street can lie down and count the money.”

Ding Dajun: “I have also heard about this. I heard the secretary of the board analyze that Ruixin Coffee is unsolvable, and no one can save it, even if Mr. Yang uses real money to protect the market. Because the US stock market is not like the A-share market [China’s mainland stock exchanges], the way they deal with financial fraud is very strict. The company is delisted, and the relevant responsible persons are imprisoned, which is much more serious than our A-share market’s painless criticism. So, I am also very curious about what Mr. Yang is planning to do.”

Yang Chen: “I was also inspired unintentionally and thought of a way to turn defeat into victory, and at the same time help Moutai Group break the circle.”

Everyone became serious, is there such a way?

Ding Dajun: “Mr. Yang, tell me, what is the way?”

Yang Chen: “Let me first analyze from the Ruixin aspect. For Ruixin, financial fraud is a foregone conclusion, the capital market is powerless, and we can only start from the business aspect to rescue it. However, there are very few people in Dragon Country [China] who drink coffee, and most of them prefer so-called petty bourgeoisie brands such as Starbucks, leaving not many customers for Ruixin. If we simply start from the main business of coffee, even if we buy the most expensive coffee and sell it to consumers at cabbage prices, it will be too late to reverse the decline. Therefore, we must develop a product that everyone is interested in and can ensure a short-term explosion to turn defeat into victory.”

Everyone nodded, agreeing with Yang Chen’s statement.

Ding Dajun: “Since Mr. Yang knows that even buying the most expensive coffee and selling it to consumers at cabbage prices will not help, how can we develop a popular product?”

Yang Chen: “This requires me to analyze from the Moutai aspect. Moutai has high prices and a gross profit of up to 90%. Of course, this can guarantee that Moutai will always make money. However, this also limits Moutai’s market share and can only rely on some rich people and government officials. Ordinary people are reluctant to drink such expensive alcohol. However, Moutai cannot lower prices, and distributors, hoarders, and even the government cannot agree. I can boldly say that at least half of the people in Dragon Country [China] have not drunk Feitian Moutai [a specific type of Moutai] and other wines. This is a vast market. Is it that they don’t want to taste the cake in the wine? No, it’s that they are reluctant. Especially the female market, Moutai is almost blank in this regard. Do women not drink alcohol? Of course not. It’s just that women don’t like to drink baijiu [a type of Chinese liquor], and they are reluctant to drink such expensive baijiu [a type of Chinese liquor]. Therefore, it is very necessary for Moutai to develop a product that does not require price reduction and is indeed cheap enough to attract all ordinary people to try.”

Ding Dajun: “Yes, Mr. Yang’s analysis is very correct. Mr. Yang knows that we cannot lower prices, and you say that we want to develop a low-priced product that ordinary people can accept. Isn’t this contradictory?”

Yang Chen: “Developing coffee alone cannot save Ruixin. Developing baijiu [a type of Chinese liquor] alone cannot adapt to Moutai’s positioning. But if you add coffee and Moutai together, wouldn’t these two problems be solved?”

“Ah!” There was an exclamation from the audience.

Baijiu [a type of Chinese liquor] + coffee?

What is this combination?

Big guys, you just say I’m very good at 蹭热度 [ceng redu, riding the wave of popularity], right?