Today, Luckin Coffee (OTCMKTS:LKNCY) is once again making headlines. However, contrary to previous negative headlines, LKNCY stock is starting to see some upward momentum.
Today, shares of LKNCY stock are up nearly 10% on heavier-than-usual volume. This move comes amid a recent surge in Chinese stocks, following relatively dismal year-to-date performance for Chinese equities.
A range of regulatory headwinds have hammered Chinese stocks. President Xi has imposed some very harsh restrictions on a range of technology and security-related companies. For Luckin Coffee, a company embattled in legal issues stemming from the misstating of revenues, the past two years have been rough.
However, commentary around Chinese stocks is (finally) beginning to turn bullish. Among the catalysts investors are watching right now is a recent announcement from Xi that he is supporting the opening of a stock exchange in Beijing to serve small and medium-sized enterprises. This move looks to be pro-capitalism and is much-needed given the recent decisions made by the Xi government, which many foreign investors took as a sign “capitalism with communist characteristics” may be dead in the water.
Let’s dive into another key catalyst driving LKNCY stock today.
LKNCY Stock Surging on Restructuring Update
As part of Luckin Coffee’s bankruptcy-linked restructuring, a number of key things need to be done. The company can operate on a day-to-day basis as usual. However, key debt obligations need to be restructured according to the plan put forward by Luckin Coffee’s board.
Yesterday, the company announced that it has extended a key deadline in the restructuring plan to Sept. 22. This deadline is in regards to the company’s restructuring of $460 million of 0.75% Convertible Senior Notes.
Generally speaking, delays in restructuring plans are viewed differently from other operational delays. Investors may view this extension as a positive. Should the company be able to deal with its debt situation in one fell swoop, investors stand to benefit from the certainty this provides. Accordingly, it appears investors like what they see with the restructuring plan in combination with today’s catalysts.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.