Ottobock shares tumble 10% after Grizzly short report alleges owner debt risk

 Shares in Ottobock SE & Co KgaA (ETR:OBCK) crashed over 10% on Tuesday after Grizzly Research published a short-seller report alleging the German prosthetics maker’s controlling shareholder faces a debt crisis that endangers minority shareholders, and placing a €30 fair-value target on the stock.

Grizzly Research, which disclosed a short position in Ottobock, said majority owner Hans Georg Näder has pledged all of his approximately 81% stake as collateral against a payment-in-kind loan with a principal of €1.02 billion, maturing March 31, 2030.

The loan accumulates interest at roughly 15% per annum, implying a repayment obligation of approximately €2.36 billion at maturity, according to the report.

Ottobock went public on the Frankfurt Stock Exchange in October 2025 at a total equity valuation of €3.8 billion, with approximately €808 million in IPO shares sold. 

The company’s current market capitalisation stands at €3.9 billion, with only 14% of shares trading as free float.

Grizzly estimated the loan-to-value ratio on Näder’s pledged shares at 36.1% as of March 31, 2026, based on the latest available BaFin filings. The report said a margin call would be triggered should the share price fall below approximately €38.58.

The loan is held by Carlyle Global Credit, Kohlberg Kravis Roberts, Hayfin Capital Management and Macquarie Capital Principal Finance. It becomes immediately due if Näder’s shareholding falls below 60% or if he loses control of Ottobock, according to Ottobock’s IPO prospectus.

Näder’s holding vehicle, Näder Holding GmbH & Co. KG reported equity of negative €77 million at year-end 2024, down from €593 million in 2017, with total liabilities of €2.72 billion and a net loss of €176 million in 2024, according to German Unternehmensregister filings cited in the report.

Grizzly also alleged Ottobock derives an estimated 35.1% of total net income from Russia, with Russian revenue rising to 8.8% of global revenue in the first half of 2025, up from 6.8% in full-year 2024 and 5.0% in 2023, according to the company’s IPO prospectus.

On valuation, Grizzly compared Ottobock’s trailing price-to-earnings ratio of 42.6 times against closest peer Embla Medical hf., which trades at 21.0 times trailing earnings. Ottobock reported GAAP IFRS net margins of 5.3% for 2025 against an "Underlying Core EBITDA" margin of 26.0%, as disclosed in its annual filings.

Ottobock’s year-on-year earnings growth slowed to 9.3% in the first quarter of 2026 from 196.5% in full-year 2025. Embla Medical reported earnings growth of 21.4% in the same quarter.

"PIK is risky for almost everyone involved. For shareholders, the most worrying aspect of PIK debt is the way it can snowball to a size that eats into the equity of the business," Bloomberg was quoted as saying in the Grizzly report.