Pirelli Threatens Legal Action After Short Seller Claims Hidden Russia Ties
Italian tire giant Pirelli has instructed lawyers to pursue legal action in multiple jurisdictions, CNBC reported Thursday, after short seller Grizzly Research published a report alleging the company maintains a “close relationship” with Russia that threatens Western national security.
Pirelli Grizzly Research Russia Report Sparks Sharp Market Reaction
Pirelli shares swung dramatically on the news. The stock shed as much as 13% following the report’s release before recovering most of those losses. Shares were trading just below the flatline by late morning. The company denied the allegations outright, calling the report’s content untrue and damaging to its reputation and shareholders.
Grizzly Research argued that Russian corporate filings tell a different story than Pirelli’s public disclosures suggest. The short seller claims those filings imply roughly 10% of Pirelli’s net profits originate from Russian operations. That figure contrasts sharply with Pirelli’s own disclosure, which groups Russia alongside the Middle East, Africa, and India, attributing just 6% of total revenues to that combined region.
Background: Tire Makers and the Russia Exit
Following Russia’s full-scale invasion of Ukraine in early 2022, major global tire manufacturers faced intense pressure to leave the market. Rivals including Michelin, Continental, Goodyear, and Bridgestone each accepted significant write-downs as they wound down Russian operations. Pirelli said at the time it would freeze further investment in the country, though it did not fully withdraw. That partial stance has drawn renewed scrutiny in light of Grizzly’s report.
Also Read: What Russia Sanctions Mean for European Industrial Firms
Security Concerns and Factory Proximity
Grizzly’s accusations extend beyond profit figures. The short seller claims Pirelli’s Kirov manufacturing facility sits within an industrial complex shared with a Russian state-owned tire producer. That producer is reportedly controlled by a military research institute, which Grizzly says holds a 25% stake in a significant portion of Pirelli’s Russian business. A second minority shareholder, holding just under 10%, is alleged to have close ties to the same institute.
Grizzly also alleged that a tire distribution center listed on Pirelli’s own website, located in Russian-occupied Ukrainian territory, has been used to supply tires to Russian military forces. The short seller said Pirelli employees were aware of the military end-use. Pirelli flatly rejected those claims, reaffirming that it does not manufacture tires for military purposes and that Italian authorities were already informed of this position.
The company said its legal team at Gatti Pavesi Bianchi Ludovici Studio Legale Associato has been mandated to pursue action across all relevant jurisdictions. Last month, Grizzly made comparable allegations against German prosthetics firm Ottobock, suggesting a pattern of targeting European manufacturers with Russia-linked operations.
Read Next: Grizzly Research’s Ottobock Report and the Short Seller’s European Focus
