I'm not interested in EOS and don't hold, however short seller attacks are a risk to any company, especially companies that are (or appear to be) growing at a decent clip. Sometimes the claims are false or only half true, and the companies that are targeted recover quickly, once such example is WTC a few years back, and also Rural Funds (ASX:RFF) in 2019; other times it can take the growth premium and a lot of the optimism out of the target company's SP and they may never again trade at their prior lofty forward PE multiples, and other times the company will go broke because there's enough truth in the rumours / allegations / opinions that the target company's credibility is all shot to hell - example: Blue Sky Alternative Investments Limited (ASX: BLA). See here: https://stocksdownunder.com/activist-short-sellers-bought-down-a-company/

Sometimes a company can convince enough people that there's nothing wrong, even when there is, and then they recover but later the house of cards falls down anyway, long after the original short seller attack - example: Corporate Travel (CTD), currently suspended after their new auditor found very significant issues with their European accounts. Years ago the short seller attack on CTD alleged, among other things, that CTD had phantom offices in countries or cities where they had no offices (CTD said their own website hadn't been updated for a while) and that there were problems with CTD's revenue recognition policies / practises - it turns out that last accusation WAS true; it just took a few more years for it to come to light in a way in which it could no longer be swept under the carpet.

Once your auditor refuses to sign off on your annual accounts, which is what happened to CTD and recently forced the resignation (on Feb 2nd) of its founder and MD Jamie Pherous, it's hard to come back from that, particularly when the subsequent investigations reveal even worse problems than what the auditor was concerned about.

The "true believers" on toxic forums such as that one commonly abbreviated to HC will always claim it's a conspiracy, is or should be illegal, or the short sellers should be jailed, whenever one of their pet companies is targeted, without much consideration of whether there is ANY truth to the allegations.

I have been involved in both a company that was targeted and survived intact, and another one that went to the wall - TFS Corporation (TFS), which changed its name to Quintis Ltd; It was a major sandalwood plantation operator that collapsed after being targeting by short sellers, and went through multiple insolvency events. 

What we need to do in these circumstances is either:

(1) sell out, and use your time on the sidelines to calmly and rationally work out if there is substance to the claims and what the implications are likely to be to the company; i.e. can they survive, and if they do survive, are they still going to have the same market valuation in the future as they had in the past, questions like that, i.e. what are they worth now?, and act accordingly, or;

(2) Do that analysis on the fly while still holding, especially if the market has already smashed the company's SP and you're already sitting on a sizable paper loss, and then make a call to either cut your losses and/or watch from the sidelines, or maybe even double down if you're totally convinced that the accusations are bogus and have no merit.

Plenty of things to consider, and people's decisions will also be impacted by their own personal risk tolerance.

In relation to EOS, I have nothing to say other than that investors and potential investors in these sorts of companies need to realise that many conditional non-binding contracts or letters of intent (they're not the same thing but have the same attributes) may or may not result in binding contracts so may amount to something, or nothing, given time. And even legally binding contracts don't always guarantee payment particularly if the contract is with a company, organisation or other entity that is small and would only have the ability to pay if they themselves can successfully execute on their own business plans and meet their own sales forecasts. Some contracts go pear-shaped, even binding ones, and the main "contract" (agreement) that the Grizzly report is focused on was not even a binding contract.

So maybe smoke without fire, maybe smoke and mirrors, but the lesson is probably that if the market bids up a company to the point where their share price actually rises +22.94% on the day on the basis of the company announcing a conditional and non-binding contract (EOS-enters-US$80m-Conditional-High-Energy-Laser-Contract.PDF) (15-Dec-2025) then another +16.56% the day after, so from $5.01 to $7.53 (+50% in two days), that's probably an overreaction to the upside. When there's that much projected future growth priced in on such a weak basis, it doesn't take much to burst that bubble, such as Grizzly pointing out that EOS may never see one cent of that US$80m. EOS have confirmed that this is correct in their reply on Tuesday (Response-to-Grizzly-Research-Report.PDF).

I'm not a fan of short sellers, particularly those who go short and then publish negative "research" or even personal opinion to create the conditions in which a company's share price is more likely to go down than to rise, but I accept that it's part of the game, i.e. it can't be avoided, but the chance of it happening can sometimes be reduced a little, such as by not investing in companies whose share prices are based in no small part on future growth projections that may or may not happen. And when a short report inevitably does happen to a company that I hold, which it has (at least three times that I can remember), I then have to make a decision based on what I know (what I think I know) and whether I think the allegations or opinions of the shorters are likely to have enough merit to matter longer term.

But there's not much to be gained by getting mad at them. That's how I see it anyway. Getting mad at shorters is like road rage, it might make us feel a little better at the time, but it doesn't improve the situation other than that. There's still going to be bad drivers out there and there's still going to be people trying to short and report on companies where they think they have uncovered something negative that the market is overlooking.