Eutelsat Shares Jump 5.1% Midday After Tuesday's Drop
Eutelsat Communications' stock shows a significant rebound this Friday, December 5th at mid-session. The stock is up 5.1% at 2.165 euros, with trading volume representing 0.37% of the capital, after suffering last week from the fallout of a massive sale of subscription rights by SoftBank.
Recovery After a Sharp Decline
The stock is recovering after falling nearly 8% on Wednesday, December 3rd, when the Japanese group SoftBank announced the sale of 36 million subscription rights, equivalent to about 26 million shares, nearly half of its current stake. SoftBank Group Capital sold these rights to raise funds that will be used to finance the exercise of its remaining rights in Eutelsat's capital increase. However, the stock remains under significant pressure over medium and long terms: the weekly performance shows only a +0.23% increase, while over three months and one year, the stock has declined by 0.75% and 4.9%, respectively. The validity period for Eutelsat's preferential subscription rights ends on December 9, 2025, after which these rights will lose all value if not exercised. Additionally, a significant purchase of 14 million shares by an executive for an estimated 56 million euros demonstrates internal confidence in the group's value, though this signal remains isolated in a context marked by a large dilutive operation.
Capital Increase to Strengthen Financial Structure
Eutelsat has launched a capital increase with the maintenance of preferential subscription rights amounting to approximately 670 million euros, as part of a total capital raising of about 1.5 billion euros. The capital increase will result in the issuance of 496,129,728 new ordinary shares at a price of 1.35 euros per new share. Subscription commitments amount to approximately 475 million euros, representing about 71% of the capital increase, from the French Republic via the Agence des Participations de l'État, Bharti Space Ltd, the British government, CMA CGM Participations, and the Strategic Participation Fund. This operation aims to strengthen the group's financial structure to accelerate the deployment of its satellite activities in low orbit and support the IRIS² constellation project. Additionally, the financial context has slightly improved: Moody's agency upgraded Eutelsat Communications' long-term credit rating from B2 to Ba3 on December 1st, stating that its stable outlook would depend on the company's ability to stabilize its results over the next 12 to 18 months. This revision serves as a foothold in a delicate strategic phase.
Technical Perspective Shows Mixed but Mostly Bearish Signals
From a technical perspective, the stock displays contradictory but predominantly bearish signals. The RSI stands at 17, an extremely low level indicating a marked oversold zone, which could signal a potential short-term technical rebound, as observed this Friday. The price is significantly below its moving averages: the MM50 is at 3.26 euros and the MM200 at 3.53 euros, respectively 33% and 39% above the current price, confirming a deteriorated underlying trend. The stock is struggling against a resistance threshold at 3.69 euros, while a technical support is forming at 1.97 euros, close to the lowest level reached last Wednesday. The MACD remains negative with a line at -0.37 and a signal at -0.28, confirming the absence of a sustainable bullish momentum. With a one-month volatility at 33.04%, the stock maintains a high speculative profile, in a market now awaiting the outcome of the capital increase and the group's ability to stabilize its business model.
