Eutelsat Shares Tumble as SoftBank Unloads Rights

Trading floors were rattled on Wednesday morning following a major move by Japanese technology conglomerate SoftBank. The group’s subsidiary, SoftBank Group Capital, offloaded approximately 36 million subscription rights, triggering a sharp sell-off in Eutelsat’s equity. The stock plunged roughly 7% to €1.96, breaking decisively below the €2 threshold. This dramatic price action has left investors questioning whether this marks the start of a sustained divestment or is merely a technical financing maneuver within the satellite operator’s ongoing capital measures.

Behind the sell-off lies a complex financing strategy. Reports indicate SoftBank is utilizing the proceeds from this rights sale to fund the exercise of its remaining subscription rights. In effect, the Japanese group remains invested, though its relative stake will be diluted. The market, however, reacted with pronounced nervousness to the sudden flood of rights and the resulting technical selling pressure.

This event unfolds against the backdrop of Eutelsat’s massive €1.5 billion capital increase, which continues to fuel significant concerns over shareholder dilution. The sheer scale of the fundraising has overshadowed recent operational progress, keeping the stock highly sensitive to actions by its major shareholders.

Key Developments at a Glance:
* Share Price Impact: Equity fell 7% to €1.96.
* Catalyst: SoftBank's sale of 36 million rights for self-financing purposes.
* Broader Context: Ongoing dilution fears from the €1.5 billion capital raise.
* Positive Signal: Moody's upgrades long-term debt rating to Ba3, citing French state involvement.

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

Fundamental Bright Spot: A Rating Upgrade

Amid the market turmoil, a fundamental positive development has been largely overlooked. Moody’s Investors Service has raised its rating on Eutelsat’s long-term obligations from B2 to Ba3.

This vote of confidence is politically driven. The capital increase elevates the French state to the position of anchor shareholder. Consequently, Moody’s now classifies Eutelsat as a "Government-related Issuer," a status that warrants a clear credit premium. Analysts at the agency also project that the company’s debt-to-EBITDA ratio will improve from the current 3.9x to a healthier 2.5x by 2026.

Operational Momentum Continues Unabated

While the share price contends with technical pressures, Eutelsat’s business operations continue to advance. The company has announced a strategic partnership with MSTelcom in Angola, aimed at extending the reach of the OneWeb low-Earth-orbit (LEO) constellation into the most remote areas.

The focus is on serving lucrative industrial clients in the oil, gas, and mining sectors—industries critically dependent on reliable satellite connectivity. Fundamentally, the strategic signals remain positive. Yet, for now, every piece of good news is being drowned out by the massive dilution and the arbitrage activity surrounding the subscription rights. The stock remains, for the time being, a plaything of its largest investors.