Luckin Coffee (LK  ), a Chinese competitor to industry giant Starbucks (SBUX  ), is in uncertain territory after being handed a delisting notice from NASDAQ. The decision to delist by Nasdaq comes after an investigation into illicit practices by the company.

News of Nasdaq's delisting notice was made public on Tuesday. The decision by the exchange was a direct result of fraudulent activity by Luckin coming to light in April. According to the company itself, COO Jian Liu and "several employees reporting to him" were engaging in fraud that included creating fake customer transactions and inflating costs and expenses. The total amount of fraud was estimated to be around $310 million. The total has not been independently verified as of the writing of this article, and the company has stated it may be subject to change as it further investigates.

In response to the scandal, Luckin Coffee has been purging employees tied to the fraudulent activity. Liu, as well as CEO Jenny Zhiya Qian, were both fired from their positions and later forced to resign from the Board of Directors. In response to the delisting notice, Luckin Coffee has requested a hearing with Nasdaq to contest the delisting and remain on the exchange. Standard procedure for Nasdaq hearings has such appeals typically heard a month or so after requested, it may be at least two months before Nasdaq comes to a decision in Luckin's appeal.

The fraud and the subsequent delisting notice have not boded well for Luckin Coffee, which was allowed to resume trading Wednesday after a monthlong freeze by Nasdaq. The company lost 40% of its share price during premarket trading and was down a further 35% by mid-morning. Shares of Luckin closed at $2.84 on Wednesday, and at midday on Thursday were at $2.01. The company has lost over 90% of its share price in the early months of 2020, dropping from $50 in January to yesterday's $2. The most significant drop in share price came in April amid the trading freeze by the exchange, which saw the price plummet from $26.20 to $6.40.