Australian Defense Firm Faces Scrutiny Following Critical Report
07.02.2026 - 05:12:04
Shares of Electro Optic Systems (EOS), an Australian defense technology company, were halted from trading on Friday after a steep decline triggered by a short-seller's allegations. The stock plummeted 15% to 16%, reaching a price of 6.00 AUD, prompting management to request a suspension. This represents a significant drop from its January valuation above 11.00 AUD.
The catalyst was a report from Grizzly Research, which raised serious questions about two key company developments.
The short-seller's analysis centers on a purported $80 million contract for laser systems in South Korea and the recent acquisition of MARSS for up to 228 million AUD.
According to Grizzly Research, the South Korean partner for the laser contract is not a major defense procurement entity, as implied by EOS, but rather Goldrone Co., Ltd., a small agricultural drone manufacturer. The report contends that Goldrone has limited staff and revenue, lacking the financial capacity to execute such a substantial order.
Furthermore, the acquisition of MARSS is scrutinized for apparent discrepancies in reported revenue figures across different jurisdictions. The strategic rationale behind the deal's valuation is also called into question.
Should investors sell immediately? Or is it worth buying EOS?
Trading Halt and Company Response
In response to the market reaction, EOS immediately sought a trading halt to prepare a formal statement. The suspension is effective until February 10, 2026, or until the company releases an announcement addressing the claims.
In a coincidental twist, the company inaugurated a new production facility in Singapore on the same day the report was published. This center is designed to manufacture 100-kilowatt high-energy laser systems for export clients in the Netherlands and South Korea—markets now under heightened scrutiny.
Despite the controversy, EOS reported a firm order backlog of 459 million AUD as of December 2025.
The company's ability to rebut these allegations when trading resumes will be critical in determining whether investor confidence can be restored or if the crisis deepens.
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