Ikea, BP, Apple, and McDonald's closed their operations in Russia after the invasion of Ukraine began but some companies stayed put and profited.
As February gave way to March, investors sent the stock price of Nokian Tyres tumbling 55% in one week. Based in Finland, Nokian has 80% of its production in Russia.
With tightening sanctions, pressure grew on all companies to exit Russian markets and operations. But Nokian stayed, even as fellow Nordic corporates H&M (Henne & Mauritz), Ikea, Fiskars and Kone either scaled-back on operations or suspended exports and sales to the market.
Nokian is not alone in keeping its Russian lights on. Days after the Russian February 24 invasion of Ukraine, researchers at the Yale School of Management began keeping a running tally of foreign companies’ announced actions or intentions regarding Russia. In that time, the list has evolved from two categories of action (stay or go) to five. At one end of that spectrum is complete withdrawal (Accenture, Bumble, Daimler, Vanguard). At the other end is “digging in,” open rejection of calls to exit. Between those extremes lies a range of middling efforts.
But there’s no indication that investors are sanctioning companies that are “digging in,” according to Yale’s taxonomy. Alibaba, for example, saw its stock price dip 25% March 10—March 15, before surging back to 20% above its pre-invasion price. Fellow “remainers” Acer, Asus, DiDi, and International Paper likewise have seen stock prices rebound to pre-invasion levels or higher.
Nokian’s stock was recovering, too, until reports emerged in late March that the company expected to profit from the departure of its competitors—Bridgestone, Continental and Michelin. The company quickly proferred a different explanation, as shares fell 13% the next trading day.
“By continuing to operate the passenger car tire factory in Russia, we want to make sure that the factory is operated and controlled by Nokian Tyres also in the future,” the company said on March 22, adding that it would curtail Russian investment and expand in Finland and the US.
In militarily unaligned Finland, which shares an 830-mile border with Russia, the invasion of Ukraine has renewed Finnish interest in joining the North Atlantic Treaty Organization (NATO). Moscow has repeatedly warned Finland that NATO membership would prove a high risk, game-changing action that would completely alter relations between the two countries.