Eutelsat Shares Slip as Investors Pause Rally on Ukraine Prospects

Post by: Pratik Kumar

Photo : Reuters

Eutelsat’s shares fell on Friday after a big rise earlier this week. The French-British satellite company saw its stock price drop by 16.6% to 5.77 euros at 08:55 GMT. Before this, the stock had gone up 477% by Thursday’s close. This made it one of the biggest price jumps in recent times.

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Experts say small investors played a big role in pushing the stock up. Some traders who had bet that Eutelsat’s stock would fall were forced to buy it at higher prices to avoid losses. This made the stock price rise even more. The rally began after an argument last Friday between Ukrainian President Volodymyr Zelensky and former U.S. President Donald Trump. After this, the U.S. paused military aid to Ukraine, making people wonder if Ukraine would need new internet services.

Many compared this sudden rise in Eutelsat’s stock to the “GameStop effect” of 2021. That year, retail investors drove up the price of GameStop, a struggling video game store, causing a big stock market surprise. Kepler Cheuvreux, a financial research firm, called Eutelsat’s rise "the French version of the GameStop effect."

Eutelsat is now in talks with the European Union to provide extra internet services for Ukraine. The company is also discussing a deal with the Italian government for a secure satellite communication system. However, some Italian politicians say Italy should work with a stronger company like Starlink instead of Eutelsat.

On the French stock market forum Boursorama, many people are talking about Eutelsat’s stock. One person wrote, "Wait until the stock falls to 5 euros before buying again. Trading is still high." In the first hour of trading on Friday, 2.6 million Eutelsat shares were sold, which is almost as much as the 30-day daily average of 2.7 million.

Some investors think that if Ukraine stops using Starlink, Eutelsat could become very important for military communication. One investor from Latvia, Martins Krusts, even called Eutelsat “the cheapest defense company on Earth” in a post on X (formerly Twitter). However, Eutelsat has not made any statement about its stock price changes.

Meanwhile, investment bank Goldman Sachs changed its opinion on Eutelsat’s stock. The bank had earlier advised investors to sell, but on Friday, it admitted that this was a mistake. Goldman Sachs upgraded the stock to “neutral” and said it had underestimated how much government support could help Eutelsat. The bank also said that rising defense budgets could bring new opportunities for the company.

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