Pirelli was accused of supplying tires to the Russian army. Shares fell 13%

US short-selling activist Grizzly Research accused the Italian tire manufacturer Pirelli of hiding real income from Russia and indirectly supplying the Russian army. Pirelli said the allegations were "untrue" and instructed lawyers to litigate "in all jurisdictions." Grizzly has a short position in Pirelli shares - that is, the company makes money on their fall.

What are they accused of?

— Hidden income from Russia. According to Russian reporting, which Grizzly studied, Russian legal entities for 2024 contributed about 10% to the company’s net profit. Since 2024, Pirelli itself has been revealing Russia only as part of a common region with the Middle East, Africa and India - this is 7.2% of revenue for the entire region for 2025 (€485.7 million), 7% (€475.4 million) for 2024.

— Infrastructure support for military production. The Pirelli plant in Kirov is located on the same industrial site as the plant of the Rostec NIIR Institute. According to a 2023 Russian arbitration award cited by Grizzly, the NIIR plant receives heat through Pirelli pipes. NIIR, according to Grizzly, produces tires for military equipment.

— Dealer in occupied Donetsk. The dealership in Donetsk is listed on the official website of Pirelli in Russia. According to Grizzly employees who called the number provided, the center operates and serves the Russian military.

— Possibility of ordering for military needs through the hotline. Grizzly employees called the Russian Pirelli hotline, posing as military personnel, and received an internal email to place an order.

— Hiring war veterans. HR of the Kirov Pirelli plant allegedly confirmed to a Grizzly employee the practice of hiring veterans of the invasion of Ukraine.

Market reaction

Pirelli shares at trading in Milan today fell to €5.31 - minus 13% at the opening. After the company published a press release with the intention of suing Grizzly, the shares recovered most of their losses and by mid-day were trading around €6.09, which is 0.7% below yesterday's close. At the same time, academic research shows that companies that file lawsuits against short sellers perform significantly worse than the market in the long term.

What else is Grizzly known for?

Grizzly is a relatively young fund, but it has already had several high-profile investigations. In March, he accused the French hotel chain Accor of involvement in the trafficking of Ukrainian orphans who were transported through Kazakhstan and Uzbekistan for adoption in Russia.

In April, Grizzly took a short position in Swiss asset manager Partners Group, accusing it of overvaluing assets in evergreen funds (open-ended funds with no expiration date) - the short seller estimates that up to 40% of investments may be significantly overvalued.