Shares of Chinese drone maker EHang Holdings Ltd’s plunged on Tuesday following a report by an investment research firm which stated that it had shorted the stock and questioned the accuracy of its business reporting.
Shares of Guangzhou, China-based EHang’s shares closed 62.7% lower at $46.30 on Nasdaq.
In a report, Wolfpack Research, which specializes in short-selling, said EHang is “an elaborate stock promotion” and that the company had lied about its products, manufacturing, revenues and partnerships.
Responding to the report, EHang said the Wolfpack report contains “numerous errors, unsubstantiated statements, and misinterpretation of information.”
EHang said, it is in compliance with the regulations of the U.S. Securities and Exchange Commission and Nasdaq.
In early December 2020, EHang’s shares had surged from $13 a share to $124.09 on Friday. The company made is U.S. debut in December 2019 through an IPO wherein it had priced its shares at $12.50 each.