Dear RotumaThe CROWS announcement is very disappointing but it...

Dear Rotuma

The CROWS announcement is very disappointing but it is not the only iron in the fire for EOS.

In respect of the CROWS order, EOS was not the primary contractor RECON was. This should not be forgotten, because I suspect history will prove that RECON stuffed up badly (probably) or the decison was made for political convenience (may be) - but Mr Bush you could have brought a nice present to Australia!

One must not forget that EOS has an excellent record as primary and this has been evidenced by a number of recent wins against Kongsberg (4) in an open tender process.

I suspect the relationship with RECON will be tested - if I was a RECON director I would be looking for heads to roll but EOS is not to blame and it must now set its own course.

What now? Sell and we will probably be selling low, possibly very low. Cash 40 cents, no debt, a lot of respected and valuable intellectual property with great potential, winning (most) contracts in open competition - objectively not the strongest of sell cases.

So should we buy? This may really hurt emotionally (and I am really fighting this as well), but it may arguably be exactly the right thing to do if the share price gets smacked. The lower it goes, the bigger the rebound will be off the low point!!

Personally, I do not see the US market as dead. There is an appeal process through the tender, but it is hard to see the decision being reversed. However, there are the other branches of the US armed services (not to mention plenty of other military forces around the world.)

Regards Eos