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- EHang, a drone company based in China, snapped back from its 63% decline on Wednesday after a negative short report.
- Wolfpack Research said in a report on Tuesday that EHang is an “elaborate stock promotion.”
- EHang has responded to the report, calling it “deceptive” and “unsubstantiated.”
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EHang snapped back from its 63% decline on Wednesday after a short-seller report from Wolfpack Research said the Chinese company is an “elaborate stock promotion.”
EHang is developing an “autonomous” aerial vehicle ridesharing network, with its main vehicle similar in design to a large drone, according to its website.
The stock fell 63% on Tuesday, and was down as much as 12% in pre-market trades on Wednesday before surging as much as 16% in the regular trading session. Wolfpack alleges EHang’s relationship with its primary customer “is a sham” based on recorded phone calls, on-site visits, and behind the scenes photographs.
“Common with a stock promotion, EH has only collected on a fraction of its reported sales since its mid-December 2019 IPO,” Wolfpack said.
EHang is pushing back on the report, call it “deceptive” in a statement and that it “strongly believe that the report contains numerous errors, unsubstantiated statements, and misinterpretation of information.”
Shares of EHang were on a tear prior to Wolfpack’s research report. The stock soared 515% year-to-date before the report. Even at Wednesday’s prices, the stock is still more than 100% year-to-date.
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