NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased EHang Holdings Limited (NASDAQ: EH) American Depositary Shares (“ADS”) between December 12, 2019 and February 16, 2021, inclusive (the “Class Period”). Investors have until April 19, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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On February 16, 2021, analyst Wolfpack Research published a scathing 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 EH . . . than about buying its products.” Wolfpack Research 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 EH’s various facilities . . . .” Wolfpack Research also noted that “in just 14 months as a publicly traded company, EH’s PR team has put out 50 press releases . . . . However, EH’s constant stream of press releases are easily proven untrue.” Finally, Wolfpack Research wrote that it “obtained Chinese court records which show that EH’s ADRs may already be in serious jeopardy due to legal issues in China.”
On this news, the price of EHang’s ADS fell from its February 12, 2021 close of $124.09 to a February 16, 2021 close of $46.30 per share, a one day drop of $77.79 per share or approximately 62.7%.
The complaint, filed on February 17, 2021, alleges that throughout the Class Period defendants made materially false and misleading statements regarding the Company’s business. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company’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 ADS began trading on NASDAQ in December 2019; (iv) the Company’s manufacturing facilities were practically empty and lacked evidence of advanced manufacturing equipment or employees; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
If you purchased EHang ADS during the Class Period and suffered a loss, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at firstname.lastname@example.org, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.