Eutelsat Shares Rally as Investor Sentiment Shifts

Eutelsat FR0010221234

The shares of European satellite operator Eutelsat closed the trading week on a strong positive note, signaling a potential shift in market sentiment following a period of significant pressure. This recovery comes after the company's announcement of a major capital increase and the substantial divestment by a key shareholder tested investor resolve.

Key Market Movements:
* On Friday, Eutelsat's equity advanced by 5.35%, closing at a price of €2.165.
* Trading activity was notably high, with a volume exceeding 560,000 shares on the Tradegate exchange.
* The market has been processing a capital raise exceeding €670 million.
* SoftBank, a major investor, offloaded a significant portion of its subscription rights.

In a move that initially rattled the market, the Japanese technology investment giant SoftBank dramatically reduced its stake. The investor disposed of approximately 36 million subscription rights earlier in the week, equating to a share package of around 26 million stocks. This action nearly halved the position of this cornerstone investor. The immediate reaction on December 3 was a sharp decline, with the stock falling by almost 7%.

This development occurred during a delicate phase for the company. The ongoing rights issue, aimed at raising over €670 million in fresh capital, has created additional downward pressure as existing shareholders face dilution of their holdings. Management views the capital infusion as essential to fund the expansion of the OneWeb satellite constellation and to reinforce the company's balance sheet.

Government Backing Provides a Foundation

While one prominent private investor retreats, strategic public shareholders maintain their commitment. The governments of France and the United Kingdom have collectively invested more than €700 million in Eutelsat. This state participation highlights the firm's strategic importance within the European space sector and offers a layer of stability.

Despite this support, Eutelsat, with a current market capitalization of €1.48 billion, remains a relatively small player compared to U.S. rivals such as Starlink. Year-to-date, the share price reflects a challenging period, recording a loss of 26.35%.

Signs of Market Absorption

Friday's robust gain suggests that the market may have absorbed the impact of SoftBank's sell-off. The elevated trading volume indicates genuine buyer interest rather than merely technical corrections. Notably, the share price reclaimed ground above the €2.15 level.

Analysts caution that volatility may persist until the subscription period for the rights issue concludes. The company's next scheduled financial update on February 13, 2026, is anticipated to provide clearer evidence on whether the capital measures are yielding their intended strategic and financial benefits.