U.S.-based short-seller Grizzly Research has taken a short position in Pirelli (PIRC.MI), opens new tab, the firm said on Thursday, questioning whether the tyremaker was making more money from Russian operations than it was disclosing.
At the market open in Milan, the stock fell by as much as 13.4%, before paring losses to 5.4% at 0745 GMT. Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here. Russian filings obtained by the short-seller imply around 10% of Pirelli's net profit comes from operations in the country, Grizzly Research said in a report published on its website.
As of March 31, Pirelli attributed less than 6% of its revenue to Russia, Middle East, Africa and India combined, according to the company's quarterly report published in May. "We suspect this growth in the Russian business may be driven by demand from the Russian invasion of Ukraine," Grizzly said, adding Pirelli’s ties with the Russian state may pose security risks for the West.
In March 2022, following Russia's invasion of Ukraine, Pirelli said it had halted investments in Russia, aiming to limit activities in local factories to those needed to guarantee the financing of salaries and social services for employees.
