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
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.
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