Trustpilot’s share price may have staged a recovery this morning, but the reputational hit from a blistering short-seller report will not be brushed off so easily. The company is once again trying to defend the integrity of its platform, and this time the questions look far more serious.
The stock climbed nearly 14% to 147.20p after yesterday’s heavy sell-off, a sell-off that erased roughly £200m from its market value. The slump followed allegations from US short seller Grizzly Research, which compared Trustpilot’s business model to a mafia-style extortion scheme. It is a comparison that will stick in investors’ minds for all the wrong reasons.
Grizzly accused the company of creating unsolicited review pages that attract waves of negative comments. The accusation is that these profiles pressure businesses into signing up for Trustpilot’s paid services simply to manage the fallout. The report goes further, alleging that ratings for paying members appear to improve almost magically, while genuine negative reviews are challenged or removed.
The 26-page document was first reported in The Times and paints a picture of a platform where commercial interest and review integrity are tangled together in ways that are difficult to defend. For anyone who has long suspected that Trustpilot’s ecosystem looked suspiciously curated, the report makes uncomfortable reading.
Trustpilot hit back within hours, dismissing the claims as selective and misleading, but the initial market reaction spoke louder than its statement. A one-day fall of more than 30% reflects genuine concern about the business model at the heart of the company. A technical rebound in the share price does not change the fact that investors now face a much bigger question about trust in Trustpilot.
The company has always insisted that it offers a transparent system for managing online feedback. That defence looks weaker today, not because of one short seller but because the allegations echo issues many businesses and consumers have quietly raised for years. It does not help that the web is full of services offering to clean up Trustpilot pages or boost ratings for a fee. Anyone who spends time in digital marketing knows how common these offers are.
Trustpilot floated in London in 2021 with the promise of being a global authority on online reviews. This report challenges that positioning at its core. Even if the company successfully discredits Grizzly’s findings, the questions raised will linger and could reshape how the market views the platform’s integrity.
The shares have recovered, at least for now. The reputation behind them has not.