When EHang Holdings Ltd. first sold shares to the U.S. public in December 2019, investors weren¡¯t exactly sold on the rare chance to bet on the future of flying cars. The Chinese company makes ¡°electric vertical take-off and landing¡± (eVTOL) aircraft, which function a bit like a helicopter but are powered by batteries and have multiple rotors. Its passenger drones are pilotless, too, unlike those of most of its rivals.
EHang¡¯s listing ¡ª a traditional initial public offering underwritten by Morgan Stanley and Credit Suisse ¡ª raised just $41 million and valued the company at less than $700 million. Since then it has been caught up in a surge of excitement about the development of air taxis, and at the start of this week it was worth $6.8 billion.
On Tuesday its share price suffered a serious malfunction. More than 60% of its value went up in smoke after a short seller, Wolfpack Research, published a report questioning EHang¡¯s sales relationships, technology and regulatory approvals. EHang said the report contains ¡°numerous errors, unsubstantiated statements, and misinterpretation of information.¡±
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