Ehang Stock is Too Hot to Touch

23 Feb 2021

Has anyone seen this company Ehang? EH This company is too cool. It's a Chinese company that manufacturers flying cars. We want to buy one.

TradingView really needs to start letting us post pictures and not just charts:( but basically Ehang manufactures and sells these flying cars that use dozens of helicopter blades to levitate. You've never seen anything like these "cars" or vehicles before, so I suggest you all check out their website to see some pictures ehang.com/ehangaav

As for the business case, besides transport and taxi functions, Ehang is marketing them to be used for firefighting and package delivery. They are working on their autonomous technology, so basically they want these "vehicles" to fly themselves.

So this company listed on Nasdaq in December 2019, and the shares listed at $12.5 dollars per share. Earlier this month, the shares were trading above $100 dollars, and went as high as $120 dollars per share.

But then a short report came out from this company called Wolfpack Research alleging all kinds of misdeeds at Ehang. You can check out the report here: wolfpackresearch.com/research/ehang/

Please note, we at Tiger Brokers take NO side or judgement in this dispute between Wolfpack and Ehang and it should be noted that Ehang has disputed Wolfpack's allegations. WolfPack also previously went short Chinese online video platform iQiyi IQ and that stock hasn't collapsed, so do your own research on this one.

Now Ehang has some pretty cool looking technology, and even after the recent fall after the short report, the stock is still up over 4X since it listed at the end of 2019. Right now Ehang has a market cap of $2.9 billion dollars and when you look at the financial reports, the valuation is certainly rich and investors are really excited about the firm's prospects.

In Q3 2020, which was the firm's last published financial report, they had about $10.4 million dollars in revenues and basically broke even with a net loss of about 150K USD, which was a marked improvement from Q2 2020 when revenue was around $5 million dollars and the loss was around $2.8 million dollars. The balance sheet doesn't look bad either and Ehang has about $35 million dollars in cash, cash equivalents, and short term investments.

Again, we take no opinion on the short report, but what potential traders NEED to pay attention to is the float of Ehang.

You see Ehang has about 54 million shares outstanding, but only 9.5 million are floating on the exchange, so with so few floating shares, the stock is normally pretty volatile. Yesterday 7.2 million shares were traded.

No matter which side you take, be careful with this one!