Have you bought coffee? Has the coupon been used? I believe that from the day before yesterday, countless people hurriedly ordered a cup of coffee to be shocked. The long queue at the take-out store that created this spectacle was Ruixing Coffee, which admitted financial fraud of RMB 2.2 billion .
Luckin Coffee, which was established in 2017, was once a business myth. It was listed on the Nasdaq in just two years. It seems to have created a legend but now it has become a laughing stock.
The dream of coffee known as "defeating Starbucks" suddenly vanished last night, and the scandal exposed the market value instantly evaporated 4.95 billion U.S. dollars . Many netizens also raised their long-standing doubts: What does Luckin rely on to make money?
Cheap coffee drinks obviously can't support multi-billion-dollar listed companies, and it's just a joke to drink socialist coffee with capitalist wool. Who really benefits from it?
Even if the chairman came out to apologize today, it will not be able to restore the trust of the entire company in the business world.
In 2001, there was a big case of the century on the other side of the ocean that was similar to Ruixing's false accounts: the Enron incident .
You may not have heard of Enron Energy, but it was definitely the big brother of the business world 20 years ago. Ranked 7th among the world's top 500 companies, with a market value of up to 80 billion U.S. dollars , this is a truly world-class leading company.
The same question, how does Enron make money? Look at how it makes money.
Enron , founded by Ken Lei in 1985, was born with a strong background . Lei, who was closely related to Bush Sr. , received more than one billion government subsidies, allowing his business to thrive. Under his first family power and multi-party lobbying, the government even gradually released energy control and handed it over to the free market.
Huge subsidies require more profits to maintain operations . That was Enron's first crime in 1987. During the two years of its establishment, Enron had no way to make money, and the illegal act of two traders seeking personal gain through oil trading gambling turned out to be the main source of company profits.
They make money by gambling on the rise and fall of oil prices to buy and sell .
After the scandal Ken Ray has not only expelled the two, but hope to bet more profits, this fantasy is brought to jail and someone's loss of 90 million persons .
Without the two devil traders, Anron needs to find a new way of making money. A genius appeared- Skilling . His good idea was to build Enron into an energy wholesale trading market, buying and selling energy just like buying and selling bonds, and also implementing performance reviews of the company to eliminate employees with poor performance.
Skilling 's arrival rescued Enron and made it soar into the sky, but there was a hidden crisis under the thriving surface.
What does Enron rely on to make money? By dreaming. It sounds incredible, but it is the disadvantage of fair value measurement . Fair value measurement allows companies to use future earnings as the weight of the contract, which allows Enron to fabricate its own earnings out of thin air.
Enron spent more than one billion to build a power plant in India, but it lost all of it because the Indians could not afford the high electricity bills. There is no doubt that the return from this move is zero, but its estimated return is astonishing, which makes a group of executives such as Skilling earn millions of dividends out of nothing.
Where can the real money be made? stock. Enron acquired the power company and became the nation's largest natural gas and electricity wholesale retailer. This is inevitable for the stock market to rise.
Seeing the prosperity of the network industry, Anron announced its entry into the broadband trading market and partnered with Blockbuster . Its stock price seemed to fly upwards with wings.
Bragging to blow up the stock price, no technology is useless. Without broadband technology, it is only possible to make the 53 million profit that it may generate from the cooperation with Blockbuster, but the executives still make a lot of money.
How to hide losses and debts of tens of millions and hundreds of millions of dollars, short-sale companies have taken it all, and Enron's tens of billions of debts are all distributed to various companies and funds, and people will have a new look without knowing it.
These methods are far from enough. Its final trick is related to the official career of a famous actor- Arnold Schwarzenegger . California where the governor is appointed is their treasure pot for making money.
At that time, the energy crisis affected the United States, and the states could only cope with power outages. However, production of electricity in California can actually afford their own needs, then Enron to sell these low-cost electricity and then let the state of California higher price back, in order to profit .
If there is still too much electricity, they will shut down power plants and reduce output to drive up electricity prices. Only for the millions of California residents who have no access to electricity, Enron has made nearly tens of billions .
The former governor was tortured helplessly. This is the prerequisite for Schwarzenegger to take office afterwards.
The evil deeds cannot be sustained for a long time. In 2001, Enron, who was complained of, had an incident involving false accounts and debts. The market value of 80 billion fell to only 200 million, tens of thousands of employees were unemployed, and billions of pensions disappeared.
Those executives sold stocks early and realized hundreds of millions of dollars, watching the employees lose everything.
In addition to the greedy senior executives, the banks and credit bureaus led by Arthur Andersen Accounting Firm and Citibank were all condemned. Those who should whistle to wake up the Enron Dream were all embarrassed by money.
Back to the question at the beginning, how does Luckin Coffee make money?
A question that even ordinary people feel is incredible. A beverage store with a few dollars and a cup creates a tens of billions of industry and has to sell fraudulent sales. How can it be packaged as an entrepreneurial myth and sold to investment institutions? It took Enron several years to clarify. Luckin couldn't give an answer for a while .
But to say that Luckin is bent on pitting capitalism to let the people drink cheap coffee, please don’t dream of the white wolf. If a prostitute can make dozens of dollars in a cup of coffee, then how much benefit someone has gained from the entire enterprise, It goes without saying .
At present, the China Securities Regulatory Commission has stated that it will inspect Luckin Coffee in accordance with the law, and the institutions and personnel involved will be investigated. Ruixing has also applied to the insurance company for directors and senior staff liability insurance claims to try to make up for the black hole of losses. As a senior staff chief executive officer Liu Jian, it seems that the responsibility to bear is not small.
In three years, the Phoenix has become a black chicken . Who will end this commercial "miracle", just wait and see the results of the investigation.
View more about Enron: The Smartest Guys in the Room reviews
