Although slated for a delisting from the Nasdaq, Luckin Coffee (LK  ) may just catch the market by surprise and prove itself to be a cheap buy over the long run.Shares of the Chinese coffee giant skyrocketed by 155% last week, with the exchange having to temporarily freeze trading of the stock on Monday due to its high volatility.

In January, Gina Sanchez, CEO of investment consulting firm Chantico Global, said: "I would say that the fundamentals actually still favor Luckin, even over Starbucks (SBUX  ), which is a very well-established and very well-run company. It's impressive to see a company with that kind of discipline this early in their cycle. They got to break even by Q3 2019 at a store level, and that just really paves the road, from a fundamental perspective, for a really interesting long-term buy."

Yet, this couldn't have been further from the stock's current reality.

Many market players have currently placed Luckin on their danger watchlist for a plethora of reasons, chief of which are related to its scandalous financial history.

Firstly, investors have garnered much distrust for the company after its former COO and CEO- now fired- played a role in fudging its core financial statements in order to inflate results and amplify investor optimism. However, the company's management has been revamped, with Mr. Jinyi Guo appointed to director of the board, Senior VP of the company, and as acting CEO.

In addition, many were concerned about Luckin opening too many stores too soon. This further weighed on the company's profits, especially because its prices were around a third of what Starbucks would charge, heavily pressuring its margins. Whenever prices were raised, demand significantly fell for Luckin coffee, potentially pegging it as a highly elastic discretionary good that is in direct competition with already-established brands like Starbucks, with less than a fraction of its market share.

In light of these events, the Nasdaq motioned to have Luckin delisted from the exchange effective by the end of the month, publishing a press release on May 29 stating the index committee's decision to delist the company on the basis of:

1. Failure to disclose material information in a timely manner.

2. Public interest concerns (as a result of the accounting fraud).

After being delisted, the company would trace in the OTC market which is much less liquid, making it lose its value and purchase.

Despite this, many investors still think the stock could hold long term value, given the company joins some kind of product licensing deal with a company like Dunkin Donuts (DNKN  ) looking to move into the Chinese market. Currently, Dunkin only has 16 stores in China, making Luckin a good opportunity for expansion.

Above all, it is imperative that Luckin brings in stronger new management that has experience in the beverage industry. Luckin could also expand its tea offerings, particularly because the Asian market favors tea and this would differentiate the brand as a domestic player over American brands like Starbucks.

Moreover, Luckin has announced that it appealed the Nasdaq's decision to delist, which could imply that investors could still look to hold on to the stock longer than until the end of the month.

Granted, the risks associated with this stock greatly outweigh the rewards, but if the company manages to fix its structural issues and change its public image, it could experience enormous gains and be undervalued. Either way, the stock right now is extremely cheap, and many investors are looking to cash out before the end of the month when Luckin is (possibly) delisted from the Nasdaq.