Korean investors shudder as drone maker EHang’s stock plunges on short seller report
South Korean investors holding $550.3 million worth of shares in Chinese drone maker EHang Holdings appear to be left in disarray as the Nasdaq-listed firm’s stock price plummeted on a short seller report on Feb. 16.
EHang Holdings was the ninth-largest stock listed on the United States bourse to be in custody of the Korea Securities Depository until last week, according to the latest data by the KSD.
It was also the seventh-most active US-listed stock this year, as Korean individuals and corporate investors traded $804.3 million EHang shares from January until Feb. 12. As a result, Koreans have net bought $93.3 million worth of EHang shares during the same period.
(Courtesy of EHang Holdings)
This comes as the Guangzhou-based autonomous aerial vehicle maker plunged 62.7 percent during the Feb. 16 session following a report by Wolfpack Research before it shorted the stock. Its $4.2 billion market cap evaporated in a single day.
Wolfpack Research alleged that EHang was “built on largely fabricated revenues based on sham sales contracts.” The drone maker has made “false claims of commercial approval of its vehicles” by regulators in China, US, Canada and Europe, while its primary purported customer Shanghai Kunxiang Intelligent Technology has “exaggerated physical presence,” the report said.
EHang responded that the short report contains “numerous errors, unsubstantiated statements, and misinterpretation of information.”
Before the short seller took aim at it, EHang was one of the US stocks that showed stellar performance. From January until Feb. 12, EHang shares rose nearly sixfold. The Monday session was closed in observation of the Presidents’ Day federal holiday.
In Korea, EHang conducted a test flight of its pilotless, two-seater air taxi -- named EHang 216 -- at several Korean cities in November.
By Son Ji-hyoung (firstname.lastname@example.org)