SHANGHAI, CHINA – MARCH 22: Pirelli tire compounds lined up for display before the sprint ahead of the F1 Chinese Grand Prix to be held at the Shanghai International Circuit in Shanghai, China on March 22, 2025. (Photo credit: Mark Sutton – Formula 1/Formula 1 via Getty Images)
Mark Sutton – F1 | Formula 1 | Getty Images
italian tire manufacturer Pirelli The company has directed its lawyers to take legal action against Grizzly Research after short sellers released a report alleging that the company has “close ties” to Russia that “pose a threat to Western national security.”
Pirelli has instructed lawyers from Gatti Pavesi Bianchi Ludovici Studio Legare Associato to “take action in all jurisdictions against those who spread this false information” in order to “protect the honor of all shareholders and the company,” the company said in a statement on Thursday.
This followed a report by Grizzly Research that claimed to have found a discrepancy between Pirelli’s published revenues and the revenues it claims to have found in Russian filings.
Many major tire manufacturers michelin, continental, goodyear and bridgestonewas forced to accept a large write-down when exiting its Russian business following Moscow’s full-scale invasion of Ukraine in 2022. Pirelli said at the time that it would halt further investment in the country.
“The general investor perception seems to be that Russia is a fairly irrelevant part of Pirelli’s current operations,” Grizzly said. “Our study paints a different picture.”
The short seller made similar accusations last month about German prosthetics and orthotics company Ottobock’s ties to Russia, arguing that Russian filings suggest 10% of Pirelli’s net profits come from operations in the country. This compares to the tire maker’s claim that Russia, the Middle East, Africa and India together account for just 6% of its revenue.
“We suspect that this growth in Russian business is being driven by demand from Russia’s invasion of Ukraine,” Grizzly said.
“We found that tire centers in occupied Ukraine listed on the Pirelli website were providing services to the Russian military, and that Pirelli employees were aware that the buyers were purchasing tires for the Russian military fighting in Ukraine and shared their contact details for orders.”
Pirelli shares initially fell after the news, but have since rebounded.
Short sellers added that Pirelli’s ties with the Russian state “could pose a security risk to Western countries” and argued that Pirelli’s Kirov factory operates in an industrial park that also houses Russia’s state-run tire production company, which is controlled by military research institutes.
“The same institute holds a 25% stake in much of Pirelli’s Russian operations. The only minority shareholder with a 9.99% stake appears to have very close ties to the institute,” the institute claimed.
“Pirelli appears to share critical infrastructure with the institute’s factories, and we are concerned that through this proximity and corporate ties to the Russian state, Russia could gain access to technologies critical to advanced military equipment.”
Pirelli’s stock price was volatile on Thursday. It initially fell 13%, offsetting most of its losses, and ended up trading just below the flatline.
“The contents of the memo from Grizzly Research do not reflect the truth,” the Italian organization said in a statement.
“Pirelli reaffirms that, inter alia, it does not manufacture military tires, as is already known and was communicated to the relevant Italian authorities long ago.
“In order to protect the reputation of all shareholders and the company, Pirelli has mandated Gatti Pavesi Bianchi Ludovici Studio Legale Associato to take action in all jurisdictions against those who spread this false information.”
