EHang extends two-day decline to 72% after short-seller says drone company is a stock promotion (EH)

<p><img src="https://static2.businessinsider.com/image/5f6358f657b7da001ee1225e-2000/gettyimages-1207642155.jpg" border="0" alt="trader nyse worried chart" data-mce-source="Getty Images / Xinhua News Agency"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul><li><strong>EHang, a drone company based in China, extended its two-day decline to more than 70% after a negative short report.</strong></li><li><strong>Wolfpack Research said in a report on Tuesday that EHang is an "elaborate stock promotion."</strong></li><li><strong>EHang has responded to the report, calling it "deceptive" and "unsubstantiated."<br></strong></li><li data-stringify-indent="0"><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener noreferrer" data-stringify-link="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell" data-sk="tooltip_parent"><strong data-stringify-type="bold">Sign</strong><strong data-stringify-type="bold">&nbsp;</strong><strong data-stringify-type="bold">up</strong><strong data-stringify-type="bold">&nbsp;here for our daily newsletter, 10 Things Before the Opening Bell</strong></a><strong data-stringify-type="bold">.</strong></li></ul><hr><p><a href="https://markets.businessinsider.com/stocks/eh-stock">EHang</a> extended its two-day decline to more than 70% on Wednesday after a short-seller <a href="https://wolfpackresearch.com/research/ehang/">report from Wolfpack Research</a> said the Chinese company is an "elaborate stock promotion."</p><p>EHang is developing an "autonomous" aerial vehicle ridesharing network, with its main vehicle similar in design to a large drone, according to its website.&nbsp;</p><p>The stock fell 63% on Tuesday, and was down as much as 12% on Wednesday. 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.&nbsp;</p><p>"Common with a stock promotion, EH has only collected on a fraction of its reported sales since its mid-December 2019 IPO," Wolfpack said.</p><p>EHang is <a href="https://www.globenewswire.com/news-release/2021/02/16/2176685/0/en/EHang-Responds-to-Deceptive-Wolfpack-Research-Report.html">pushing back</a> 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."</p><p>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 up 96% year-to-date.</p><p><img src="https://static2.businessinsider.com/image/602d1cc758476300183236de-750/ehangg.JPG" border="0" alt="ehangg.JPG" data-mce-source="Markets Insider"></p><p><a href="https://markets.businessinsider.com/news/stocks/ehang-stock-price-short-seller-report-stock-promotion-wolfpack-research-2021-2-1030092370#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-symphony-seas-worlds-largest-cruise-ship-deals-with-waste-2020-3">How waste is dealt with on the world's largest cruise ship</a></p>
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