Prague, May 5, 2026, 16:08 CEST
After a short-seller report cast doubt on Czechoslovak Group’s ammunition production claims, the Czech arms maker tried to calm investors on Tuesday. The stock slumped 13.1% at Monday’s close, having plunged as much as 26% during the session—its steepest drop since January’s Amsterdam IPO, according to Reuters.
The dispute comes as CSG’s profile rises in Europe’s defense supply chain. The company has been delivering ammunition and gear to Ukraine, which is racing through supplies, while NATO allies scramble to restock. On Tuesday, CSG shares slipped 0.62% to €15.90, according to MarketScreener, after ending Monday at €16.00.
Hunterbrook Media—backed by a fund that’s short CSG—claimed the company leans harder on “recommissioning” than investors might think. That process involves acquiring used ammunition, fixing or upgrading it, then returning it to service. After running its own numbers, Hunterbrook estimated 155 mm production at just 100,000 to 280,000 rounds. That’s far less than the approximately 500,000 rounds it believes could be guessed from CSG’s own prospectus. HUNTERBROOK
CSG pushed back against the report. In a statement Tuesday, the company pegged its 2025 in-house production capacity at roughly 630,000 medium- and large-calibre rounds. Hunterbrook, CSG said, misread the distributed manufacturing setup, which spans multiple sites and nations. The company stuck to its goal of boosting output by about 20% this year, counting 70,000 rounds from a new plant in Slovakia. As for the €58 billion Slovak framework, CSG described that figure as a potential seven-year maximum, not a locked-in order book.
CSG’s January IPO landed during a surge in defence stocks, pulling in up to €3.8 billion—the biggest defence listing on record, according to Reuters. Shares debuted at €25 and wrapped their first session at €32.85. “Very strong appetite for defence names,” is how Andrea Scauri, portfolio manager at Lemanik, described it to Reuters, as European governments ramped up military spending following Russia’s incursion into Ukraine. Reuters
The way CSG stacks up against rivals isn’t helping matters. According to Investors’ Chronicle, Jefferies highlighted that 50% to 60% of CSG’s medium- and large-calibre ammunition revenue currently comes from recommissioned stock and partnerships. That proportion is set to drop sharply—to somewhere between 10% and 20% over the medium term—as CSG ramps up production in-house. Rheinmetall also got a mention in the same report, positioned as a key force in Europe’s restocking plans, aiming to push its large-calibre output past 1.6 million rounds by 2027.
There’s more at play here than just factory numbers. According to Brussels Signal, the accusations touch CSG’s role in the Czech Ammunition Initiative for Ukraine, supposed mark-ups slapped on old Soviet stock, a NATO procurement freeze tied to a Spanish facility, plus a €1.4 billion put option dispute involving a minority shareholder. CSG, for its part, rejects profiteering claims and insists it wound down all Russian-linked business after the 2022 invasion.
CSG’s figures spell out the story for investors. For 2025, the company posted revenue of €6.74 billion, adjusted operating EBIT at €1.63 billion, and net debt sitting at €3.00 billion. Its order backlog reached €15 billion, with another €27 billion in the pipeline still under negotiation. Looking ahead, CSG expects revenue between €7.4 billion and €7.6 billion for 2026. First-quarter numbers drop May 20.
The risk isn’t one-sided. XTB pointed out that if Hunterbrook’s allegations prove accurate, the real concern goes beyond capacity—resale and refurbishment could falter if inventory keeps dwindling. Still, XTB flagged Hunterbrook’s vested interest due to its short position, adding that the company’s more detailed responses remain relevant.
Right now, it’s a battle over what counts, what’s on paper, and who you believe. CSG is sticking to its prospectus and what it’s told investors since the IPO. Hunterbrook points to a gap between the company’s narrative and what’s actually happening on the ground. The coming test: CSG has to prove it’s ramping up internal production, tightening up cash flow, and locking in orders—otherwise, that January IPO story could start to unravel.
