It’s been a rollercoaster week for EHang (NASDAQ:EH), Chinese maker of autonomous aerial passenger drones, as EH stock fell off a cliff last Tuesday, Feb. 16, after being accused of faking its revenues. Yesterday, Tuesday, Feb. 23, EHang completed its first trial flights in Beijing, and has subsequently gained in trading today despite news of a class-action lawsuit filed on behalf of shareholders against the company.
Yesterday’s trial flights represent the first time a passenger-grade autonomous aerial vehicle (AAV) has flown over Beijing airspace and were conducted in particularly cold conditions to ensure robust testing. The company said that as of this month, it had “… successfully conducted more than 10,000 trial flights of its EH216 AAV, including passenger-carrying trial flights, in 42 cities across 8 countries.”
Meanwhile, today’s class action lawsuit filed by Portnoy Law builds on last Tuesday’s report by Wolfpack Research accusing EHang of faking its revenue numbers. EH stock plunged on the day before recouping some of those losses, though it still closed more than 35% down.
EHang responded to Wolfpack Research’s allegations by repeatedly and vehemently denying the report, announcing an onsite Investor Day and sharing details of its sales contracts. The company also detailed its business relationship with one of its biggest customers.
While these releases don’t address every facet of the Wolfpack report or the Portnoy lawsuit, they do address the bulk of the accusations. We’d also be remiss not to note that Wolfpack Research is short EH stock.
It might be too early to tell investors not to worry about the report or the lawsuit, but it would be unfair to suggest EHang hasn’t taken decisive action that ought to ease investors’ concerns. EH stock was up 7.79% on the day.
On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.