EHang has strongly refuted claims by Wolfpack Research that the eVTOL aircraft developer is “a stock promotion destined to crash and burn.” In a statement issued late on February 16 in response to a report issued earlier in the day by the self-proclaimed “activist research firm” that largely focused on taking short positions on equities, the Chinese company said that the accusations made by Wolfpack were based on “numerous errors, unsubstantiated statements, and misinterpretation of information.”
In trading on New York’s Nasdaq exchange, EHang’s stock closed the day almost 63 percent down at $46.31. This ended a surge that had seen the stock peak at $124.09 as recently as February 12, more than halving the company’s valuation from above $6 billion to just over $2.5 billion.
Wolfpack’s inflammatory report accuses EHang of fabricating revenues “based on sham sales contracts” and of boosting its perceived value “with a collection of lies about its products, manufacturing, revenues, partnerships, and potential regulatory approval” for the EH 216 Autonomous Aerial Vehicle. Much of the report focuses on a company called Shanghai Kunxiang Intelligent Technology that Wolfpack says is a major customer for the aircraft sales that EHang claims to have made. Based on investigations conducted in China, Wolfpack characterizes Kunxiang as a “sham customer," alleging that it bought shares in EHang before its December 2019 initial public offering and has connived to boost the value of this equity by ordering aircraft.
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