SoftBank's Share Sale Impacts Eutelsat's Market Performance
Europe’s satellite giant Eutelsat experienced a significant stock decline on Wednesday following SoftBank's sale of 36 million rights, which equates to approximately 26 million Eutelsat shares. This announcement led to a 7.2% drop in early trading, with shares continuing to trade lower as of press time, according to CNBC data.
Eutelsat Faces Stiff Competition from Starlink
The timing of SoftBank's share unload is particularly challenging for Eutelsat, a company that merged with OneWeb in 2023 with the aim of competing against Starlink, the satellite-internet division of Elon Musk's ventures. However, Eutelsat still significantly trails Starlink in terms of operational scale. Eutelsat reports operating over 600 satellites, while Starlink boasts more than 6,750 satellites in orbit, highlighting a substantial disparity in their satellite constellations.
Earlier this year, Eutelsat had shown positive momentum. In early March 2025, its shares surged by over 600% as Europe intensified efforts to bolster its technological infrastructure, partly in response to a reduction in U.S. military support for Ukraine. This upward trend, however, proved unsustainable.
Since reaching its March highs, Eutelsat's stock has fallen by more than 70%, negating most of its annual gains and raising questions about the viability of its long-term strategy. To address these challenges, the French government intervened in June, leading a €1.35 billion (approximately $1.57 billion) investment round. This made Paris Eutelsat's largest shareholder, holding a stake close to 30%. While this infusion of capital provided a crucial lifeline, it has not been sufficient to alter the company's competitive standing in the market. The merger with OneWeb has not yielded the market dominance that many in Brussels had anticipated.
SoftBank's decision to sell off its holdings might signal further selling pressure in the market. The Japanese company has not yet provided an official explanation for its actions. However, the nature of the sale suggests a lack of interest in retaining shares amidst potential dilution. In the current market environment, such large sell-offs often trigger additional selling from other investors.
European Stock Markets Show Gains Amidst Economic Indicators
Despite the negative impact on Eutelsat, European stock markets opened on a strong note today. The Stoxx Europe 600 index was up 0.32% at 577.50, and most major regional indices registered gains. France's CAC 40 climbed 0.27% to 8,096.74, Italy's FTSE MIB jumped 0.76% to 43,683.47, Germany's DAX rose 0.32% to 23,786.81, and Spain's IBEX 35 surged 1.50% to 16,721.00. Conversely, the UK's FTSE 100 saw a slight decrease of 0.14% to 9,687.74.
These gains followed a rebound in U.S. markets on Tuesday and a positive trading session in Asia overnight, after an initial weak start to the week. In the United States, all three major indices concluded the trading day in positive territory, with Nvidia leading a rally in technology stocks. Bitcoin also recovered after experiencing its worst trading session since March the previous day. The S&P 500 and Dow Jones Industrial Average both experienced dips during the session but managed to recover late, while the Nasdaq Composite remained near the flatline before lifting.
Investors are now closely awaiting the Federal Reserve's decision on interest rates, scheduled for December 10. Market expectations, based on trader sentiment, indicate an 89% probability of a rate cut. This represents a significant increase from mid-November and reflects growing confidence that inflation is decelerating more rapidly than anticipated.
Further insights into the economic landscape will be provided by the ADP private payrolls report for November, which is expected to be released approximately five hours from now. This report is anticipated to indicate a stable job market, which could provide the Federal Reserve with additional justification for considering policy easing measures if deemed necessary.