Luckin Coffee's shares, which had been frozen since April 7, resumed trading yesterday on the NASDAQ. Unfortunately, the company's financial misconduct likely still lingers in the minds of most investors, resulting in a massive sell-off once trading was reopened for the stock.

Due to the ongoing concerns over the accuracy of its financial reports and the threat of it being delisted from the stock exchange, Luckin Coffee's shares plummeted by more than 35 percent in mid-morning trading. Investors who weren't able to offload their shares last month immediately scrambled to sell off what they could, sending the stock price down to $2.84 per share.

The financial misconduct, which involved the fraudulent inclusion of over $310 million in fake transactions on the company's financial reports, severely damaged the company's reputation and credibility. When news of the scandal broke out, Luckin Coffee's stock prices sharply dropped, decreasing by more than 83 percent prior to the exchange's decision to step in and halt all trades.

When trading was halted in April, Luckin Coffee's stock price closed at $4.39 per share. The price is a massively stark contrast to around $50 per share recorded back in January. The company's shares mostly remained high earlier in the year thanks to its aggressive strategy of simultaneously opening up thousands of new locations in China. Luckin Coffee had also managed to overtake its closest rival, Starbucks, in terms of its number of outlets in China.

Some of the company's largest investors include Singapore's GIC and the Qatar Investment Authority. Both companies likely also dumped their shares once trading had resumed given the uncertainty facing Luckin Coffee's future prospects.

On Tuesday, Luckin Coffee had revealed that it had received a letter from NASDAQ informing it of its possible delisting due to its misconduct. The company stated that it would request an appeal to the decision and a hearing should be scheduled within 30 to 45 days.

Luckin Coffee initially discovered the fraudulent transactions on its own books through an internal investigation. The company found that its own chief financial officer, Jian Liu, along with other employees, had fabricated transactions to bloat its financial reports from its second to the fourth quarter last year. The company has since removed Liu, while also firing its CEO, Jenny Zhiya Qian, over the issue.

The Beijing-based coffee chain operator issued another apology this week. The company's chairman, Charles Lu Zhengyao, stated that he was disappointed with NASDAQ's decision and that he apologizes to all the company's investors and staff for the terrible impact of the scandal.