Eutelsat is navigating volatile times. At the shareholders’ meeting on 20 November, a two-fold capital increase totaling €1.35 bn was approved to fund the LEO/OneWeb expansion and to reduce leverage.
The first part, an €828 m capital increase reserved for key shareholders (French State, Bharti Space Ltd, UK government, CMA CGM and the Fonds Stratégique de Participations together hold 70%. ) was executed the day after the meeting at €4 per share and at full.
The following €670m rights issue is targeting float capital, too. The rights come with an 8:11 ratio and are tradable from Nov. 27 to Dec. 5. Based on the previous day’s market close, this resulted in a technical price of €0.75 per right.
On the 26th, the stock price adjusted to reflect the dilution and the value of the right. Note that during the rights-trading period, closing a short position requires buying both the stock and the rights accordingly.
These developments take place against a backdrop of governance instability, including the CFO’s resignation and another board reshuffle expanded French state representation. We also see a growing risk of internal friction between the French and UK parts of the business — the former operating in a more hierarchical, bureaucratic model, the latter relying on a flatter structure to drive innovation in the LEO segment. In our view, this could become a material issue, as the company’s future depends heavily on the acquired LEO business.
Analysts’ views remain widely dispersed, with price targets ranging from materially below to substantially above the current level. Such divergence reflects the uncertainty surrounding Eutelsat’s near-term operational execution.
Although fundamentals would argue for staying short, we exited the trade in line with our risk-management guidance. One reason was the growing number of price anomalies that, in our view, indicate a decoupling from fundamentals. With a company this heavily subsidized and state-influenced, such disconnects are not entirely surprising.
Secondly, the share price fell 14% the day before the rights issue, bringing the total draw-down to 41%. A good opportunity to cash in.
Capital Raise & Ownership
- Reserved Capital Increase: €828 M at €4/share, subscribed by the French State (via APE), Bharti Space, CMA CGM, and FSP.
- Post-transaction stakes: French State ~29.65%, Bharti Space 18.70%, CMA CGM 7.81%, FSP 5.22%.
- Rights Issue: €670 M at €1.35/share (8 new / 11 old). Anchor investors committed pro rata.
- Purpose: fund LEO/OneWeb and IRIS², reduce leverage to ~2.5× EBITDA by FY 2025/26.
- Negative market reaction expected due to dilution risk, macro uncertainty, and LEO execution concerns.
Operational & Financial Performance (Q1 FY2025/26)
- Revenue: €293 M (slightly down YoY from €300 M), FX headwinds and –1.2% operational vertical decline offset by growth in other revenues.
- LEO connectivity +70.7%, GEO –14%; together LEO+GEO ~22% of total revenue.
- Video –10.5%, still ~47% of revenue, highlighting structural decline.
- Government services +18.5% (~19%), mobile connectivity –12.1% (~12%).
- Backlog: €3.5 B (~58% of connectivity, up from 55%), slow conversion raises execution risk.
- Guidance: flat full-year revenue, slightly lower adj. EBITDA, capex €1–1.1 B, leverage ~2.5× post-capital raise.
Management & Governance
- CFO resignation (5 Nov); replacement Sébastien Rouge starts Feb 2026, leaving a key leadership gap during a critical capital phase.
- Board reshuffle: APE joins, Bpifrance exits, consolidating state influence.
- Timing raises execution concerns, especially amid major financing and operational changes.
Analyst Sentiment & Market Interpretation
- Consensus: Reduce/Sell, but average target above at €3.37.
- Target range: €2.00–€6.70, reflecting wide divergence on LEO monetization, OneWeb integration, and GEO revenue sustainability.
- No Buy recommendations; majority of ratings cluster at Hold/Reduce/Sell.
- Trend: average target declined from ~€12.50 (Jan 2021) to €3.37, with a sharp reset in Dec 2023. Highlights persistent skepticism regarding growth and capital efficiency.
Sources:
https://www.eutelsat.com/sites/default/files/2025-08/DOC_Investors_Press-Release__EN_190625.pdf
https://www.eutelsat.com/investors/investors (on 11/19/2025)
https://de.marketscreener.com/kurs/aktie/EUTELSAT-COMMUNICATIONS-5147/news/ (on 11/19/2025)
https://www.ad-hoc-news.de/boerse/news/ueberblick/eutelsat-aktie-cfo-schock-ueberschattet-deal/68349400 (on 11/20/2025)
A brief note on our own behalf:
HitHawk Research is a Blackstyx Capital brand and, as such, shares its core values and its aim of contributing to the democratization of investment information. Exiting a trade is at least as difficult as entering one, and you can only evaluate properly if both sides are transparent. We remain surprised that almost no one — not only short activists but also investors, analysts, or stock promoters — provides any such transparency. It seems to be avoided wherever possible.
We are aware that stepping into new territory adds risk. But if one is serious about democratization, transparency is not optional. For these reasons, and with the launch of our new website, we decided to publish not only short reports but also brief notes on trade exits. You will also find a few long investment cases, published selectively.