Eutelsat Equity Plunge: A State-Led Capital Shock

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Shares in satellite operator Eutelsat collapsed by a third last week, triggered by a deeply discounted rights issue that has dramatically reshaped its ownership. The move, which significantly dilutes retail investors, effectively places the company under French state control as Europe seeks to build a sovereign competitor to SpaceX's Starlink.

The catalyst for the 33% share price decline was the launch of a €670 million rights offering on November 25. The subscription price was set at a mere €1.35 per new share, representing a staggering 58% discount to the prevailing reference price—a severe blow to existing shareholders.

This offering is part of a broader €1.5 billion financing strategy. It follows a reserved capital increase that raised €828 million on November 21. The key terms of the rights issue are:
* Subscription Ratio: 11 rights for 8 new shares
* Subscription Period: November 28 to December 9, 2025
* Rights Trading: November 26 to December 5, 2025
* Commitments: €475 million already secured

Shareholders who do not participate face drastic dilution, with a 1% stake shrinking to just 0.58%.

Strategic Shift: France Assumes Control

The transaction precipitates a tectonic shift in the shareholder register. Upon completion of both capital raises, the French state will emerge as the dominant single shareholder with a 29.65% stake. Bharti Space will hold 17.88%, the UK government 10.89%, CMA CGM Participations 7.46%, and the Fonds Stratégique de Participations 4.99%.

This new structure sends an unambiguous strategic message: Eutelsat is becoming a vessel of state policy. Europe is determined to forge a credible alternative to Starlink, irrespective of the cost to current investors.

Analyst Reactions: Mixed Signals Amid the Fallout

In the wake of the sell-off, JPMorgan analyst Akhil Dattani upgraded the stock to "Neutral" last Friday, setting a price target of €1.90. This presents a paradoxical signal with the shares currently trading around €2.18. The rationale cited was an improved risk-reward profile following the steep decline.

Other analysts express caution. Stifel researchers acknowledge the state backing as a necessary first step but highlight the formidable scale advantages of SpaceX as a critical ongoing challenge. Bernstein analyst Aleksander Peterc has suggested that German participation could further solidify Eutelsat's position as Europe's sovereign low-earth orbit (LEO) provider.

The €4 Billion Battle Plan

The freshly raised capital is earmarked for three core objectives:
* Debt Reduction: Targeting a net debt-to-EBITDA ratio of 2.5x by the end of the 2025/26 fiscal year.
* LEO Expansion: Funding the deployment of 340 additional OneWeb satellites in low-earth orbit.
* IRIS² Project: Supporting the European satellite consortium, which is projected to generate €6.5 billion in revenue over a 12-year period.

Eutelsat has outlined total investments of approximately €4 billion for the 2026-2029 period. The scale of the challenge is immense: pitting a planned constellation of 650 OneWeb satellites against Starlink's existing fleet of over 8,000.

The company's market capitalization now stands at roughly €1.5 billion, a far cry from its 52-week high above €9. Whether the current level near €2.18 establishes a floor will be tested in coming trading sessions. While operational progress in regions like Latin America, the UAE, and potentially India may offer some stability, the shock of severe dilution continues to weigh heavily on investor sentiment.