Pirelli shares swung to gains on Thursday after the tyre maker publicly rejected a report from U.S. short-seller Grizzly Research that alleged the company had greater exposure to Russia than Pirelli had disclosed.
The stock initially plunged as much as 13% on the day, reflecting investor concern after the short-seller revealed a position against the company. Following Pirelli's formal response disputing the report's findings, the share price recovered and was trading 0.6% higher.
In a statement, Pirelli said the content of Grizzly Research's report "does not reflect the truth" and announced plans to bring legal proceedings "in all jurisdictions against those who have spread this false information." The company characterized the report as inaccurate and signaled an aggressive legal response to the allegations.
Grizzly Research, which disclosed it held a short position in Pirelli, pointed to Russian filings and argued that roughly 10% of the tyre maker's net profit is generated in Russia. That figure contrasts with Pirelli's own disclosures, which attribute 6% of revenues to the combined region of Russia, the Middle East, Africa and India.
The short-seller additionally suggested that Pirelli's growth in Russia may be connected to demand tied to the Ukraine invasion. Pirelli rebutted those suggestions directly in its statement.
Pirelli stated it "does not produce tires for military use," adding that this fact was "communicated long ago to the relevant Italian authorities."
The public exchange between the company and the short-seller drove volatile trading in Pirelli shares during the session. Pirelli's explicit denial of military tyre production and its emphasis on pursuing legal remedies were central elements of the company's response. The differing figures cited by Grizzly Research and Pirelli - 10% of net profit in Russia versus 6% of revenues from Russia, the Middle East, Africa and India combined - form the factual core of the dispute as presented by both parties.
Beyond the immediate share-price swings, Pirelli's statement focused on correcting the record and on possible legal recourse against those it says spread false information. The situation remained anchored to the facts and figures presented by Grizzly Research and Pirelli, with each side maintaining its respective assertions in public statements.