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(Bloomberg) — Electro Optic Systems Holdings Ltd. shares swung after the Australian defense company responded to a short-seller report from Grizzly Research.
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The stock fluctuated between gains and losses on Tuesday after spurning claims made by Grizzly in a report released last week. It rose as much as 9% in Sydney trading, wiping out an earlier decline of as much as 16%. Shares slid on Friday after the short seller’s publication, and were placed in a trading halt pending EOS’s reply.
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Grizzly contended that an $80 million contract announcement on Dec. 15 was misleading and unrealistic. In the disclosure, EOS said it signed a binding conditional agreement to make a high-energy laser weapon for an unnamed Korean customer, triggering a 29% stock surge that day.
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“EOS rejects the misleading, manipulatory and pejorative conclusions contained in the Grizzly report,” the firm said in an exchange filing. The A$1.2 billion ($850 million) company has directed legal advisers in Australia and Germany to consider all available legal remedies, it added.
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A wave of government military investments around the world has bolstered defense shares over the past year. In Australia, retail investors have been buying small-cap firms tied to the theme. EOS, which manufactures remote weapons, counter-drone and space intelligence systems, has spiked about 350% in the last 12 months, while peer DroneShield Ltd. has rallied more than 400%.
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EOS is the first short position that Grizzly has unveiled this year, according to a tracker on its website. Stock responses have been mixed — out of the 10 shorts named in 2025, four have risen by double digits after being targeted.
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