It is alleged in this complaint that during the class period, EHang touted the viability of its aerial vehicle technology, as well as its proliferation into China, North America, and Europe, and its financial success in several detailed press releases. However, EHang failed to disclose to investors that: (i) EHang’s purported regulatory approvals in North America and Europe were for use of its product as a drone, as opposed to carrying passengers; (ii) EHang’s relationship with its purported primary customer is inaccurate; (iii) EHang only collected a fraction of its purported sales since its stock began trading on the NASDAQ; and (iv) EHang’s manufacturing facilities were practically empty, lacking evidence of employees or advanced manufacturing equipment.
Citing “extensive evidence,” analyst Wolfpack Research reported on February 16, 2021 that Ehang is “an elaborate stock promotion, built on largely fabricated revenues based on sham sales contracts with a customer [Shanghai Kunxiang Intelligent Technology Co., Ltd.] who appears to us to be more interested in helping inflate the value of its investment in EH … than about buying its products.” It was also reported by Wolfpack Research that EHang “obtained Chinese court records which show that EH’s ADRs may already be in serious jeopardy due to legal issues in China.” EHang’s share price fell $77.79, over 62%, on this news, to close at $46.30 per share, injuring investors.
EHang Holdings Limited
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