Russia War Allegations
Pirelli Instructs Lawyers for Legal Action After Short Seller Alleges Russia-Linked Profits
Anonymous
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Pirelli said it had instructed the specific Italian law firm “Gatti Pavesi Bianchi Ludovici Studio Legale Associato” to “take action in all jurisdictions against those who have spread this false information,” aiming “to protect all shareholders and the company's good name.”
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Grizzly said the issue is not only profit disclosure but security risk, warning that Pirelli’s “relationship with the Russian state may pose security risks for the West” and that “Russia could gain access to critical technology.”
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Trading reaction details: Pirelli’s shares “hit a one-year low” at the Milan open, falling as much as 13.4%, then later pared losses to about 1.6% after the company’s statement.
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The report also marked part of a broader pattern of Grizzly’s short campaigns: CNBC noted Grizzly “last month made similar accusations of Russian links” involving German prosthetics firm Ottobock.
Pirelli's stock plunged as much as 13.4% at the Milan open on June 4, hitting a one-year low, after U.S. short seller Grizzly Research published a 40-page report alleging the Italian tire giant secretly earns roughly 10% of its net profit from Russia — profits potentially tied to demand from the war in Ukraine. CNBC reported that the company quickly fired back, calling the claims false and vowing to sue.
Pirelli said it had instructed Italian law firm Gatti Pavesi Bianchi Ludovici Studio Legale Associato to "take action in all jurisdictions against those who have spread this false information." After the company's rebuttal, shares pared most losses, recovering to down about 1.6%, according to Market Screener.
What Grizzly Research Alleged About Pirelli's Russia Ties
Grizzly's report, published at 2:00 a.m. EDT, goes far beyond a profit dispute. The short seller claimed that Pirelli's "secret dependence and close relationship with Russia poses a threat to Western national security" and warned that Russia "could gain access to critical technology." Grizzly also alleged that an undercover investigation found a Pirelli-listed tire center in occupied Ukraine supplying Russian forces, and that Pirelli employees knew the buyer's purpose, according to CNBC.
The report also flagged ownership stakes inside Pirelli's Russian entity. It claimed a Russian state-linked research institute holds a 25% stake, and another entity tied to arms conglomerate Rostec holds nearly 10%. Pirelli operates two plants in Russia — in Kirov and Voronezh — employing over 4,000 workers, according to Market Screener.
Pirelli Calls Claims False, Disputes the Profit Numbers
Pirelli pushed back hard. The company said it does not make tires for military use and that this fact was "already known and communicated long ago to the relevant Italian authorities." On the profit figures, Pirelli said its entire "Rest of World" segment — covering Russia, the Middle East, Africa, and India combined — accounts for less than 6% of total revenue, not 10% of net profit as Grizzly claimed, according to Tyre Press.
The company also noted it halted all new investment in Russia after the February 2022 invasion. It said remaining activity is limited to covering employee salaries and funding basic social services. Pirelli framed itself as a victim of "malicious" and "false" claims designed to harm its stock price and reputation.
Stock Swings Sharply Before Recovering After Company Statement
Shares opened at a session low around €5.40, a drop of 13.4% and the steepest single-day fall since 2020. That wiped out hundreds of millions of euros in market value in minutes. Pirelli's total market cap before the report stood at roughly €6.7 billion, according to Market Screener.
By mid-morning, after Pirelli's formal rebuttal landed at 10:40 CET, shares clawed back most of the losses to trade down just 1.6%. Analysts at European firms described the situation as a "reputational risk" event, with many viewing Grizzly's 10% profit figure as "aggressive math" that is hard to reconcile with Pirelli's official IFRS-standard filings, according to CNBC.
Grizzly's Pattern of Targeting European Firms With Russian Links
This is not Grizzly's first move of this kind. Just weeks earlier, in May 2026, the short seller published a similar report targeting German prosthetics company Ottobock, alleging Russian links and causing a roughly 10% stock drop. Ottobock also threatened legal action, according to CNBC. The back-to-back campaigns suggest a deliberate strategy of pressing European industrial companies on Russia exposure.
For Pirelli, the stakes go beyond this single report. The Italian government already invoked special "Golden Power" rules in 2023 to limit the influence of Chinese state-owned shareholder Sinochem — which holds about 37% of the company — over Pirelli's sensitive sensor technology. Grizzly's new report attempts to tie that same technology to Russian military interests, a claim that could trigger fresh scrutiny from Italian security agencies, according to Tyre Press.
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