Defence-tech play Electro Optic Systems (ASX:EOS) briefly became a billion-dollar stock this morning after the Morrison government expressed interest in acquiring Remote Weapons Stations.
Late last week the government announced it would invest $270bn in defence capability and infrastructure over the next decade.
The government said not only would this address security concerns but it would also create employment. It noted 15,000 businesses and 70,000 workers would benefit from the investment.
“The federal government is committed to ensuring Australian Defence Force personnel have the tools they need to protect themselves and keep Australians safe,” Prime Minister Scott Morrison said.
“At the same time we must have a robust and resilient defence industry that maximises opportunities for small businesses and supports Australian jobs and local investment.”
This includes a number of ASX stocks in this game and Electro Optic Systems, the biggest of these, is the first to benefit from this government cash splash.
Its Remote Weapons Stations are placed on top of vehicles, mounting machine guns, cannons or grenade launchers. Electro Optic Systems is also working on devices with missile launching capability.
On Friday night, the company confirmed it was in negotiations with the government.
It has not yet disclosed the specific investment, but it confirmed any deal struck with the government would not interfere with existing export orders.
This morning, on the first trading day since the announcement shares opened as high as $6.92. This briefly made Electro Optic Systems a billion dollar company.
While shares are currently off these highs, they still sit a healthy 20 per cent higher compared to last week.
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Barry Stroman was a reporter for Zerg Watch, before becoming the lead editor. Barry has previously worked for Wired, MacWorld, PCWorld, and VentureBeat covering countless stories concerning all things related to tech and science. Barry studied at NYU.