Trustpilot Shares Plunge Amid Short-Seller’s Explosive Extortion Claims

Stake in Trustpilot Group Plc, the Danish-founded online review site listed on the London Stock Exchange, fell the most in a single day in its history, at over 30% after being attacked by activist short-seller Grizzly Research with a scathing report. The extortion claims of a mafia nature have caused ripples throughout the FTSE 250, destroying close to PS243 million of market value and casting deep doubts on the authenticity of the consumer review systems.

Grizzly Research Levels Grave Accusations

A scathing report by Grizzly Research launched the Trustpilot Mafia, revealing that it was shorting the company and alleging that the company was systematically developing fraudulent accounts to spam non-paying enterprises with negative feedback.

This strategy, the firm asserts, coerces businesses into having to subscribe to high-end services, whereby they would arguably be able to control their brands better. The report states that a business that does not subscribe to anything tends to attract a rating that is lower than 2 out of 5 stars, and then it may drastically go above the 4 stars in business when it subscribes.

The research conducted by Grizzly, which reviewed the profiles of thousands of people and interviewed former employees, creates a picture of a predatory business model. The short-seller claims that Trustpilo, under CEO Adrian Blair – who assumed the position of CEO in 2023 – has not been growing with any authentic innovation but through coercive marketing, which has destroyed consumer confidence.

Grizzly believes revenue increased 18% in that year and about 20% in 2024, though at the expense of hiding further underlying problems, including anyone, including regulators, was misled by artificial review scores.

The immediate panic sale occurred as a result of the release of the report on Thursday morning. Towards midday, Trustpilot saw its shares fall by a fifth, plummeting to 131.2 pence, the lowest intra-day price since December 2023. The volume of trading increased to more than 11 million shares, whereas the three-month average is 2.5 million, as the institutional investors scurried to the trading house in order to review their exposure.

Trustpilot Fight-back with Stinging Rejection

Trustpilot did not take long to deny the allegations, publishing a blunt statement towards the end of the afternoon. The company mentioned that the report prepared by Grizzly is selective, misleading, and is framed in such a way that it supports a predetermined narrative, which it claims lacks critical context and shows a basic lack of comprehension of its operations. In the statement, it was declared that they denied such charges. We offer a platform that is based on transparency and user-generated content with strong moderation rules to achieve authenticity.

Executives highlighted that every review is verified, and premium subscriptions provide to manage the genuine reputation and not manipulate the rating. Trustpilot pointed to its recent PS30 million share buyback scheme, which it introduced in September following strong half-year performance, as a sign of belief in its fundamentals.

The company bought back 400,000 shares on December 3 at an average price of 189.58 pence, and this is a good indication to the shareholders that the leadership believes that the shares are undervalued.

Just days prior to the report, analysts pointed out the timing of the buyback as an add-on to the unfolding drama. Although the rout occurred, according to some market observers, the slip would represent an acquisition opportunity, because Trustpilot has a cash-generative SaaS business and a growing enterprise customer base.

Wider Market Splashes and Investor Wariness

It was not just Trustpilot to suffer the blow, and the whole UK tech and consumer stock market felt the pain. On Thursday, the FTSE 250 fell 0.7 per cent, pulled down by industrials and financials in the general risk-off mood across the globe. Similar platforms are being scrutinised by investors now, and there is a rumour of more scrutiny by the regulators, such as the Competition and Markets Authority in the UK.

Trustpilot is a company that was established in 2007, and it has become a global giant with millions of users giving reviews on companies across the world. It is based on a freemium business model, with the free version of the profiles but premium features. Some critics, such as Grizzly, claim that it is a perverse incentive, as a device of empowerment has become a device of exploitation.

By Friday morning, Trustpilot shares were trading at approximately 152 pence, which is still a massive drop from the pre-report levels, but with a slight indication of an improvement. The company has also set an investor call next week to discuss the concerns, but the reputation damage might not go away easily due to the stock volatility.

Prospects: Recovery or Reckoning?

In the future, analysts are split. Analysts project that the shares would rise by triple digits at present values on the strength of robust H1 2025 results and enterprise progress. Nevertheless, the Grizzly report has stirred controversy about the ethical AI regulation and the review authenticity in the digital era. In the case of Trustpilot, it will be a test of leadership by Blair and the fundamental promise of the platform, which is to create trust in an online environment that is becoming more and more suspicious.

Amidst already existing challenges in the UK markets due to Budget uncertainty, manifested in a sharp fall of construction PMI to 39.4 in November, the episode underlines the vulnerability of growth stocks in volatile markets. Trustpilot will be closely monitored as it struggles to regain its story, but the Trustpilot Mafia brand has left a very dark cloud over what used to be a celebrity in the review industry.