Shares of French satellite operator Eutelsat experienced a remarkable surge of nearly 390% last week, driven by shifts in European defense policies. The company’s stock fluctuated significantly during the week, notably gaining 77% on Tuesday followed by an additional 120% on Wednesday. This momentum continued, with shares climbing over 22% on Monday, signaling investor enthusiasm surrounding the company’s future.
What You Need to Know About Eutelsat
Eutelsat is a major player in the satellite communications industry, known for developing satellites that provide essential data connectivity. Utilizing rockets from companies such as SpaceX, Eutelsat launches satellites into both low Earth orbit (LEO) and geostationary orbit (GEO). Following a merger with the British satellite firm OneWeb in 2023, Eutelsat solidified its position as the world’s third-largest satellite operator by revenue, directly competing with Elon Musk’s Starlink project.
Reasons Behind the Stock Surge
The dramatic rise in Eutelsat’s stock price can be attributed to speculation suggesting the company might replace Starlink’s satellite services in Ukraine. For years, Starlink has been a crucial provider of internet connectivity for the Ukrainian military, aiding in operations throughout the ongoing conflict with Russia.
However, recent tensions between the U.S. and Ukraine have raised concerns about Starlink’s future involvement. Following the election of President Donald Trump, military assistance to Ukraine was paused amid deteriorating relations, particularly after negotiations with Moscow were reopened. Reports have indicated that U.S. officials might limit Ukraine’s access to Starlink unless a deal can be brokered concerning the country’s rare earth mineral resources.
On March 4, Eutelsat announced discussions with the European Union aimed at enhancing internet access in Ukraine, which likely fueled investor optimism.
Could Eutelsat Replace Starlink?
While it remains uncertain if Eutelsat will definitively replace Starlink, the company is actively exploring an expansion of its services in Ukraine. Eutelsat CEO Eva Berneke stated that there is a growing inquiry about replacing Starlink’s terminals. With a fleet of 35 GEO satellites and an extensive LEO constellation exceeding 600 satellites, Eutelsat has the capacity to provide significant satellite connectivity options.
Throughout the weekend, relations between Musk and U.S. Secretary of State Marco Rubio escalated following a disagreement with Poland’s foreign minister on the social media platform X. Musk expressed concerns that switching off Starlink could jeopardize Ukraine’s defense capabilities, while the Polish foreign minister reiterated Poland’s financial commitment to Starlink’s services.
As the situation evolves, investors and analysts alike will be watching closely to see how Eutelsat positions itself amid the shifting dynamics in European defense and satellite communication services.
