Investors hit Germany-based Lilium, developer of electric aircraft capable of taking off and landing vertically, with a securities class action following the release of a research report that questioned the company’s technology and sent its stock plummeting 34%, Courthouse News reports.
According to the complaint filed Monday in Los Angeles, Lilium’s management misled investors last year about the capacity of the seven-seat jet the company is developing and about when the aircraft will be ready for commercial production.
Qell Acquisition shareholders approved the business combination with the electric jet company in September last year, although the SPAC posted redemptions of 65%. Due to the heavy redemptions, Lilium was expected to get about $584 million rather than the $830 million expected when the deal was announced in March 2021.
A report last month by Iceberg Research, a short-seller angling to profit when a company’s shares go down, claimed that Lilium was the “losing horse” in the eVTOL race. According to the report, Lilium’s aircraft haven’t flown for more than three minutes in tests after seven years of development. Lilium projects its jets will be able to fly as far as 155 miles.
By contrast, Joby Aviation, a California-based eVTOL aircraft developer that acquired Uber’s Elevate project in 2020, has flown farther and faster than anyone else, according to the Iceberg report. Joby’s plane flew over 150 miles on the longest eVTOL test flight to date in July 2021, and the company set another record after its plane hit speeds of 205 mph during a test flight earlier this year, according to the report.
Representatives of Lilium didn’t immediately respond to an email seeking comment on the lawsuit.
The company’s stock fell 34% on the Nasdaq after the Iceberg Research report came out last month. Shares have since bounced back to some extent but remain volatile.
The lawsuit seeks class certification and damages on claims securities law violations. Attorney Laurence Rosen of the Rosen Law Firm in Los Angeles represents the putative class. Read more.
