french satellite group eutelsatThe company, which is seen as Europe’s answer to Elon Musk’s Starlink, saw its stock price plummet on Wednesday following reports from Japanese investors. Softbank Reduce investment in the company.
Eutelsat stock was trading down 7.8% as of 6 a.m. ET.
The move follows a Reuters report that SoftBank sold about 26 million shares and the rights to 36 million shares, about half of the satellite carrier’s stake.
Eutelsat is the owner of satellite internet provider OneWeb, which they merged with in 2023 to counter Starlink’s dominance in the market.
But the French group has struggled to capture market share from U.S. companies. Eutelsat currently has more than 600 satellites in orbit, while Starlink has more than 6,750 satellites, according to the companies’ websites.
Eutelsat shares, which soared more than 600% in early March, have since fallen more than 70% as Europe scrambles to strengthen its technological sovereignty following cuts in U.S. military aid to Ukraine.
The company is seen as crucial to Europe’s technological sovereignty ambitions. In June, France took the lead in investing 1.35 billion euros ($1.57 billion) in Eutelsat, making it the company’s largest shareholder with an approximately 30% stake.
technological sovereignty
SoftBank announced in November that it had sold all of its shares in U.S. semiconductor maker Nvidia to secure funding for projects such as OpenAI.
SoftBank wouldn’t have made this move if it didn’t need to fund its next artificial intelligence investment, founder Masayoshi Son said at an event Monday.
Japanese giant Eutelsat’s move reflects “aggressive monetization” across its portfolio, Okura analyst Luke Kehoe told CNBC.
“With governments and European strategic investors funding the recapitalization rather than SoftBank, Eutelsat is becoming less of a growth story and more of a pillar of Europe’s digital sovereignty infrastructure.”
While Starlink maintains its scale advantage and dominates retail broadband, Eutelsat is carving out niches in government, aviation, backhaul and emergency connectivity, Kehoe said.
“The open question is whether a higher value B2B-focused positioning can deliver attractive returns once the current wave of capex and recapitalization passes, and whether Europe is willing to continue writing checks at the scale needed to close the gap with Starlink.”
Eutelsat and SoftBank have been contacted for comment.
