Eutelsat Shares Rebound as Investor Sentiment Shifts

Following a period of intense selling pressure, investors in Eutelsat saw a welcome reprieve on Friday, with the company's stock posting a significant recovery of more than 5%. This upward move comes after a sharp decline triggered by a surprising partial exit from major investor SoftBank in the middle of an ongoing capital increase. The critical question for the market is whether a recent credit rating upgrade from Moody's can provide a foundation for sustained confidence.

The European satellite operator is currently in a pivotal refinancing phase. The subscription period for new shares remains open until Monday, December 9, 2025. Shareholders must act by this deadline, or their subscription rights will expire worthless.

This capital raise is structured around a total volume of approximately €1.5 billion:
* A rights issue component will raise €670 million through new shares priced at €1.35 each—a substantial discount to the current trading price.
* A reserved tranche will contribute €828 million at a price of €4 per share.
* The dilution ratio is set at 8 new shares for every 11 existing shares.

The transaction is also reshaping the shareholder register. The French state is leveraging this opportunity to nearly double its stake to just under 30%, a move that highlights Eutelsat's strategic importance as a European counterpart to dominant US players in the sector.

The market turbulence began earlier in the week when Japanese tech investor SoftBank sold 36 million subscription rights. This disposal represented almost half of its existing holding in the company. Such a large-scale divestment of rights during an active capital measure is frequently interpreted by the market as a loss of confidence, which accelerated the downward pressure.

Should investors sell immediately? Or is it worth buying Eutelsat?

The reaction was immediate and severe:
* The share price plummeted by almost 8% mid-week.
* It touched its lowest level since mid-June.
* Trading volume surged, exceeding 7 million shares.

Fundamental Support Emerges Amid Technical Weakness

Despite concerns over shareholder dilution, the company received a fundamental boost on December 1. Moody's Investors Service upgraded Eutelsat's corporate family rating to Ba3 from B2, assigning a stable outlook. This improvement could potentially lower the company's future borrowing costs, though it is contingent on Eutelsat delivering stable operational performance over the next 12 to 18 months.

From a technical analysis perspective, conditions remain strained. The stock is trading well below its key 50- and 200-day moving averages. However, with a Relative Strength Index (RSI) reading of 17, the shares had entered deeply oversold territory, which helps explain Friday's corrective bounce.

Strategic Focus: Competing in a New Space Race

The fresh capital, part of a broader €4 billion funding plan through 2029, is earmarked primarily for enhancing competitiveness against rivals like Elon Musk's Starlink. While the US competitor already operates a fleet of over 6,750 satellites, Eutelsat's strategy centers on revamping the OneWeb constellation with 440 new units and participating in the EU's IRIS² satellite project.

For investors, attention is now fixed on the conclusion of the subscription period on December 9. Once the new shares are fully placed in the market and the volatility associated with the subscription rights subsides, it will become clearer whether a sustainable floor has been established for Eutelsat's share price or if the dilutive effect of the capital raise will continue to act as a ceiling on its progress.