CSG Fires Back at Short Seller With Ammunition Production Data

CSG N.V. refutes Hunterbrook Media allegations with production data, addresses financial disputes, and outlines expansion plans amid stock volatility.

The Prague-based defence group CSG N.V. has mounted a vigorous defence against allegations levelled by US short seller Hunterbrook Media, releasing detailed production figures that contradict the activist investor's central claims. The Amsterdam-listed stock, which hit a 52-week low of €15.70 on Monday — representing a 54% decline from its January high — steadied on Tuesday at around €15.84, recovering from an intraday drop of as much as 4%.

The Production Capacity Dispute

At the heart of the conflict lies a fundamental disagreement over CSG's manufacturing capabilities for large-calibre ammunition. Hunterbrook's report, published on 4 May, alleged that the company produces its own munitions in a single Slovakian factory, with an estimated annual output of between 100,000 and 280,000 rounds. CSG has categorically rejected this characterisation.

The company's own figures tell a different story. CSG states that its in-house production capacity reached approximately 630,000 rounds in 2025, with 80% of that volume in the 155-millimetre calibre. The discrepancy, the company explains, stems from its decentralised manufacturing model: components are produced across multiple facilities in different countries, with final assembly occurring only at the end of the process. Scrutinising a single plant, CSG argues, fundamentally misunderstands the operation.

Looking ahead, the company plans to expand capacity by 20% in 2026, with a new production line in Slovakia set to add 70,000 additional rounds. The medium-term target stands at 1.1 million rounds of proprietary production, a move that would reduce reliance on refurbished third-party materials.

Financial Transparency and the Slovak Framework

Beyond production numbers, Hunterbrook's report raised questions about CSG's financial disclosures and the status of a high-profile Slovak munitions framework agreement. The company has confirmed that a €275 million receivable from related-party transactions was fully settled in the first quarter of 2026.

On the Slovak deal — a framework agreement with a maximum potential value of €58 billion over seven years — CSG has been careful to manage expectations. The company stresses that this figure represents an upper ceiling, not a firm order book. The situation has become more complicated by reports that none of the eight countries initially cited as potential participants have formally joined the agreement. This matters because access to the EU's €150 billion "Security Action for Europe" financing programme, which carries interest rates of just 1%, requires at least two participating member states. A temporary exemption for single-country participation expires at the end of May.

Shareholder Disputes and Regulatory Concerns

Hunterbrook also highlighted tensions with minority shareholder Petr Kratochvíl, who reportedly exercised a put option shortly before CSG's IPO and is now demanding approximately €1.4 billion for his stake. Kratochvíl is said to hold 10% of CSG Land Systems and to possess veto rights over key corporate decisions.

Additionally, the short seller pointed to the suspension of a Spanish CSG munitions factory by NATO's procurement agency over alleged sanctionable practices. CSG has characterised this as a temporary, procedural measure triggered by an internal investigation targeting an employee of the agency itself.

Analyst Confidence Remains Intact

Despite the stock's 18% decline over the past seven days, the analyst community has largely maintained its positive stance. Of 13 analysts covering CSG, approximately 82% rate the shares a buy. The average price target stands at €35.40, with the most bullish forecast reaching €42. No analyst currently recommends selling.

CSG is holding firm to its full-year guidance for 2026, targeting revenue between €7.4 billion and €7.6 billion, with an adjusted operating EBIT margin of 24% to 25%. The company's first quarterly report as a publicly listed entity is due on 20 May, and will provide the market with its first opportunity to assess whether the fundamentals support the analysts' optimism — or whether the recent sell-off reflects deeper structural concerns.