Defence manufacturer Electro Optic Systems (ASX:EOS) has suggested that US activist investor Grizzly Research may have acted unlawfully in the release of a scathing short report that sent the company’s share price into a tailspin.
The halt was triggered after the stock plummeted 15.9% to $6.03 in response to Grizzly's allegations that several of the company’s recent contracts were "intentionally misleading" and "utterly unrealistic."
EOS rejected the report’s conclusions as “misleading, manipulatory, and pejorative.”
The company specifically noted that Grizzly published the document without any prior inquiry or engagement with EOS management.
"EOS is concerned that Grizzly may have acted unlawfully and breached corporations laws in Australia and Germany," the company stated, referencing its secondary listing on the Frankfurt Open Market.
The defence contractor confirmed it has now directed legal advisers in both jurisdictions to "consider all available legal remedies."
The conflict centers on a report by Grizzly Research—which stands to profit from a decline in EOS' share price—questioning the validity of an $80 million contract in South Korea and the company's recent acquisition of European defense firm MARSS Group.
EOS pointed to its surging unconditional order book, which grew from $136 million at the end of 2024 to $459 million by late 2025.
The company maintains that its financial growth is driven by a genuine global demand for counter-drone technology rather than the "smoke and mirrors" alleged by the short-seller.
At the time of reporting, Electro Optic Systems' share price was $6.58.