Trustpilot (TRST.L) Shares Plummet on Grizzly Research's 'Mafia-Style Extortion' Allegations

On December 4, 2025, U.S. short-selling firm Grizzly Research released a report accusing Trustpilot Group plc (TRST.L) of operating a “mafia-style extortion racket” [3]. The report alleged that Trustpilot creates unsolicited review profiles for businesses without prior notice—profiles that naturally attract negative reviews—and then pressures these businesses to subscribe to costly paid plans to improve their review scores, prioritizing subscription revenue over review integrity [3]. Trustpilot immediately denied the claims, calling the report “selective, misleading, and framed to support a predetermined narrative” [2].

Reddit users (December 5) corroborated the allegations with firsthand accounts: one business reported receiving a £269/month (~$358) quote for a 12-month plan, while others noted unpaid profiles accumulate only negative reviews and drew comparisons to Yelp’s alleged extortion tactics targeting small businesses [1].

The market impact was severe: TRST.L shares dropped 32.07% on December 4, from $189.70 to $129.20, with trading volume surging to 45.59M shares—37x the 3-day average volume—indicating widespread panic selling [0]. This translated to a ~$240M market cap loss, aligning with Reddit’s £200M sell-off claim [0][1]. As of December 5, 13:22 UTC, the stock rebounded 14.16% to $147.50, likely due to short covering [0][4].

Financial metrics reveal underlying vulnerabilities: Trustpilot has a market cap of $588.21M (as of December 5), down 48.1% from its 2024 high [4]. Its P/E ratio of 765.57x is extremely high, reflecting elevated market expectations now challenged by the allegations [4]. The company’s net profit margin (0.46%) and current ratio (0.97, below 1.0) also raise concerns about financial sustainability [4].

1. Conflict of Interest in Business Model
   : Trustpilot’s practice of selling services to reviewed companies undermines its core value proposition of trustworthy consumer reviews, a concern echoed by both the short-seller report and Reddit users [1][3].
2. Pre-Existing Vulnerabilities Amplified Impact
   : The stock’s 50.67% year-to-date decline and thin profit margins made it more susceptible to the allegations, leading to a larger-than-average sell-off [4].
3. Extreme Volume Signals Market Uncertainty
   : The 37x increase in trading volume on December 4 reflects widespread investor skepticism, while the subsequent rebound suggests potential short-term market reassessment [0].

• Reputational Damage
  : If allegations are substantiated, Trustpilot’s brand trust—its most valuable asset—could be irreparably harmed [1][3].
• Regulatory Scrutiny
  : The UK Competition and Markets Authority (CMA) or global regulators may investigate the company for unfair commercial practices, leading to fines or business model changes.
• Client Losses
  : Businesses may terminate subscriptions or avoid Trustpilot due to extortion concerns, reducing revenue.

• Transparent Response
  : A detailed, evidence-based counter-argument from Trustpilot could mitigate reputational damage and reassure investors.
• Business Model Adjustment
  : Reforming review moderation and subscription practices to prioritize integrity could restore trust over the long term.

This analysis integrates market data, short-seller allegations, corporate denial, and user experiences to evaluate the impact of Grizzly Research’s report on Trustpilot. The stock’s sharp decline and volume surge indicate significant near-term market disruption, while underlying financial metrics highlight long-standing vulnerabilities. Critical areas to monitor include the full details of the Grizzly Research report, Trustpilot’s detailed response, potential regulatory action, and client/user reaction to the allegations. Decision-makers should consider the conflict of interest in Trustpilot’s business model and the potential for sustained reputational or regulatory risks when assessing the company’s outlook.