EHang Holdings Limited Class Action Lawsuit

Company Name
EHang Holdings Limited
Stock Symbol
Class Period
December 12, 2019 to February 16, 2021
Southern District of New York

Case Summary

The EHang Holdings Limited class action lawsuit charges EHang and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of EHang American Depository Shares (“ADSs”) between December 12, 2019 and February 16, 2021 (and on February 16, 2021, only for those who purchased shares at or above the price of $112.00), inclusive (the “Class Period”).  The EHang class action lawsuit was commenced on February 17, 2021 in the Southern District of New York and is captioned Amberber v. EHang Holdings Limited, No. 21-cv-01392.

EHang purports to be an autonomous aerial vehicle (“AAV”) technology platform company.  EHang has stated that it is “pioneering the future of transportation through our proprietarily developed AAVs and related commercial solutions.  We believe we are the first in the world to launch passenger-grade AAVs, setting a new milestone in the development and proliferation of AAV technology.”  EHang’s purported flagship passenger-grade AAV is the “EH216.”

The EHang class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) EHang’s purported regulatory approvals in Europe and North American for its EH216 were for use as a drone, and not for carrying passengers; (ii) its relationship with its purported primary customer is a sham; (iii) EHang has only collected on a fraction of its reported sales since its ADSs began trading on NASDAQ in December 2019; (iv) EHang’s manufacturing facilities were practically empty and lacked evidence of advanced manufacturing equipment or employees; and (v) as a result, EHang’s public statements were materially false and misleading at all relevant times.

On February 16, 2021, analyst Wolfpack Research published a report entitled “EHang: A Stock Promotion Destined to Crash and Burn.”  In this report, Wolfpack Research wrote 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. (“Kunxiang”)] who appears to us to be more interested in helping inflate the value of its investment in [EHang] . . . than actually buying its products.”  Wolfpack Research further wrote that it had “gathered extensive evidence” to support its report, “including behind-the-scenes photographs, recorded phone calls, and videos of on-site visits to [EHang]’s various facilities.”  Wolfpack Research also noted that “in just 14 months as a publicly traded company, [EHang]’s PR team has put out 50 press releases . . . .  However, [EHang]’s constant stream of press releases are easily proven untrue.”  Finally, Wolfpack Research wrote that it “obtained Chinese court records which show that [EHang]’s [ADSs] may already be in serious jeopardy due to legal issues in China.”  On this news, the price of EHang ADSs fell nearly 63%, damaging investors.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For eight consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

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