EHang Holdings Limited (EH) Investigation:
The firm is investigating whether EH has misrepresented and concealed facts concerning its financial performance, key customers, and regulatory approvals the company has purportedly obtained for its claimed main business, an "autonomous" aerial vehicle ("AAV") ridesharing network.
Since going public in 2019, EH has promoted sales contracts with major customer Shanghai Kunxiang Intelligent Technology Co., Ltd. ("Kunxiang"). The company has also issued a slew of press releases, emphasizing the numerous "flight certifications" and "long-term" approvals the company has received for its "passenger-grade" EH216 in the US, Canada and various countries throughout Europe.
But on February 16, 2021, analyst Wolfpack Research issued a scathing report entitled, "EHang: A Stock Promotion Destined to Crash and Burn." In the 33-page report, Wolfpack Research contends that Kunxiang has entered into sham contracts to benefit EH's stock price. Wolfpack Research also alleges that EH has exaggerated revenues by reporting sales for which it cannot collect. Wolfpack Research further avers that EH makes false claims regulatory approvals the company has purportedly received, misleadingly suggesting the company has commercial approval for its products.
On this news, EH shares declined sharply.
"We're focused on investor losses and whether EH has lied about its revenues, customers and regulatory approvals," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you are an EH investor, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding EH should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP