Pomerantz LLP announces that a class action lawsuit has been filed against EHang Holdings Limited and certain of its officers. The class action, filed in the United States District Court for the Central District of California, and docketed under 21-cv-01811, is on behalf of a class consisting of all investors who purchased or otherwise acquired EHang securities between December 12, 2019 and February 16, 2021, inclusive (the “Class Period”). The action is brought on behalf of the class for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5.
If you are a shareholder who purchased EHang securities during the Class Period, you have until April 19, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
EHang purports to be an autonomous aerial vehicle (“AAV”) technology platform company. The Company 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 AAV technology.” EHang’s purported flagship, passenger-grade AAV is the “EH216.”
In recent press releases and other public statements, Defendants have lauded EHang’s AAV business and prospects, including announcing numerous “flight certifications” and “long-term” approvals for its “passenger-grade” EH216 in the United States, Canada, and various European countries. As alleged in the Complaint, Defendants have repeatedly asserted that EHang is “the world’s leading [AAV] technology platform company.”
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements, and failed to disclose material adverse facts about the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and failed to disclose to investors that: (i) the Company’s purported regulatory approvals in Europe and North America for its EH216 were for use as a drone, and not for carrying passengers; (ii) EHang’s relationship with its purported primary customer is a sham; (iii) EHang has only collected on a fraction of its reported sales since its American depository shares (“ADSs”) began trading on the NASDAQ stock exchange 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.
During the trading day on February 16, 2021, analyst Wolfpack Research (“Wolfpack”) published a scathing report entitled “EHang: A Stock Promotion Destined to Crash and Burn.” In this report, and as further alleged in the Complaint, Wolfpack 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.] who appears to us to be more interested in helping inflate the value of its investment in EH[ang] . . . than about buying its products.” Wolfpack 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[ang]’s various facilities.” Wolfpack also noted that “in just 14 months as a publicly traded company, EH[ang]’s PR team has put out 50 press releases . . . . However, EH[ang]’s constant stream of press releases are easily proven untrue.” Finally, Wolfpack wrote that it “obtained Chinese court records which show that EH[ang]’s [American Depository Receipts—i.e., ADSs] may already be in serious jeopardy due to legal issues in China.”
On this news, the price of EHang ADSs fell from their February 12, 2021 close of $124.09 per share 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 Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980