A European Starlink rival’s shares skyrocketed 390% in a week — here’s why
A satellite dish in a ground network of satellites at Eutelsat’s Madeira office. Photographer: /Bloomberg via Getty Images
Zed Jameson | Bloomberg via Getty Images
Shares of French satellite operator Eutelsat skyrocketed almost 390% last week — and a potential change of tack in European defense has been helping the rally.
The firm’s stock price saw wildly volatile moves last week, up by as much as 77% on Tuesday and by another 120% on Wednesday. From its closing price on Feb. 28 to last Friday’s close, shares have risen an eyewatering 387%.
Eutelsat’s shares continued to climb on Monday, jumping more than 22% as of 1:00 p.m. local time in Paris.
What’s behind Eutelsat’s huge share price gains? CNBC runs through all you need to know.
What is Eutelsat?
Eutelsat is a French company that produces satellites for data connectivity. The business sends its satellites to space using rockets from the likes of Elon Musk’s SpaceX, deploying them into both low earth orbit (LEO) and into geostationary orbit (GEO).
Following a deal to combine its operations with British satellite firm OneWeb in 2023, Eutelsat became the world’s third largest satellite operator in terms of revenues. It competes with Musk’s Starlink satellite internet venture, a subsidiary of SpaceX.
Why are shares skyrocketing?
Last week, reports surfaced suggesting that Eutelsat was in the running to potentially replace Musk’s Starlink in the embattled Ukraine. For years, Starlink has offered Ukraine’s military satellite its internet services to assist with the war effort amid Russia’s ongoing invasion.
However, relations between the U.S. and Ukraine have soured recently following the election of President Donald Trump. Musk serves as head of the newly instated Department of Government Efficiency, an advisory body assisting the administration.
Last week, Trump paused all military aid to Ukraine following a clash with the country’s President Volodymyr Zelenskyy. The confrontation happened after Trump shifted U.S. policy on Ukraine and Russia by reopening talks with Moscow.
In February, reports said that U.S. negotiators had raised the possibility of cutting Ukraine’s access to Starlink if the two countries aren’t able to successfully negotiate a deal for the U.S. to secure access to Ukraine’s rare earth minerals.
On March 4, Eutelsat said that it was in talks with the European Union to supply additional internet access to Ukraine.
The French company’s shares had already begun surging the day prior, on the back of speculation that Eutelsat could serve as a replacement for Starlink in Ukraine if negotiations with the U.S. fracture further.
Will Eutelsat replace Starlink?
For now, it’s not entirely clear. The company is discussing an expansion of its services in Ukraine with the EU.
“Everyone is asking us today, ‘Can you replace the large number of terminals of Starlink in Ukraine,’ and we are looking at that,” Eutelsat CEO Eva Berneke told Bloomberg in an interview last week.
Eutselsat arguably has the scale to offer additional support for Ukraine in terms of satellite-based connectivity. The firm says it currently has a fleet of 35 GEO satellites, in addition to an LEO constellation of more than 600 satellites.
Over the weekend, Musk and U.S. Secretary of State Marco Rubio had a spat with Poland’s foreign minister on X, the social media platform formerly known as Twitter, which Musk owns.
The tech billionaire said that Ukraine’s “entire front line” would collapse if he were to switch off Starlink.
In response, Polish Foreign Minister Radoslaw Sikorski said his country pays Starlink for services to Ukraine, which Warsaw has supported in its battle against Moscow’s invasion since 2022. Sikorski added Poland may have to seek alternative suppliers if Starlink proves to be an “unreliable provider.”
Rubio disputed Sikorski’s claims, saying “no one has made any threats about cutting Ukraine off from Starlink” and urging gratitude — while Musk dubbed the Polish politician a “small man.”
On Monday, Polish Prime Minister Donald Tusk defended his foreign minister, saying Sikorski “calmly” explained the “Polish raison d’état to officials from another country.”
Dado Ruvic | Reuters
Elon Musk’s social media platform X experienced several outages on Monday morning, leaving some users unable to load the site.
Nearly 40,000 users reported problems with the platform around 10 a.m. ET, according to the analytics platform Downdetector, which gathers data from users who spot glitches and report them to the service. Around 28,000 people were experiencing issues as of 11:30 a.m. ET.
When X resumed loading for users Monday afternoon, Musk said the company had suffered a “massive cyberattack.” Musk did not provide any evidence, and CNBC could not independently verify that a cyberattack took place.
“We get attacked every day, but this was done with a lot of resources,” Musk wrote in a post. “Either a large, coordinated group and/or a country is involved.”
X did not immediately respond to CNBC’s request for comment.
Musk acquired X, formerly known as Twitter, for $44 billion in 2022. The Tesla CEO slashed the company’s headcount by about 80% from 7,500 employees to 1,300 workers, and just 550 full-time engineers, by January 2023.
X has experienced several large-scale outages since Musk’s takeover. Users reported problems with the platform in December 2022 and with the site’s desktop app in July 2023, for instance.
The timing of the X outage couldn’t have been worse for NFL fans, who rely on the service for news updates. The first day of the NFL’s free agency tampering window began at 12 p.m. ET with the service down, sending fans searching for other options such as linear TV and Bluesky to get their news on player signings.
— CNBC’s Alex Sherman contributed reporting.
Watch: Elon Musk on X subscriptions: ‘Free speech isn’t exactly free it costs a little bit’
CFOTO | Future Publishing | Getty Images
Bitcoin dropped under the $80,000 level Monday, dragged by the continued selling pressure in the equities market.
The price of the flagship cryptocurrency was last lower by 5% at $78,714.96, its lowest level since November, according to Coin Metrics.
Bitcoin in the past day
Shares of companies linked to the crypto space also slid. Coinbase fell roughly 14%. Robinhood lost 17%, and bitcoin proxy play Strategy, formerly known as MicroStrategy, declined 16%.
Bitcoin ETFs are coming off their fourth week in a row of outflows. They logged $867 million of outflows last week, bringing the four-week total to $4.75 billion, according to CoinShares. Continued bearishness pushed crypto prices even lower over the weekend, with bitcoin dropping sharply on Sunday evening to the $80,000 level for the first time since Feb. 28.
President Donald Trump signed an executive order to establish a U.S. bitcoin reserve and a digital asset stockpile late last week, disappointing some investors. However, macro uncertainty was the key driver of the accelerated downward move Monday, after Trump over the weekend didn’t rule out the possibility of a recession in the U.S.
Absent a crypto-specific catalyst, macro concerns are likely to continue weighing on cryptocurrency prices in the near term. This week, the market will be watching for key economic indicators, including the Job Openings and Labor Turnover Survey (JOLTS) Tuesday, the consumer price index on Wednesday and the producer price index slated for Thursday.
Although investors expect cryptocurrency prices are likely to pull back even more before making a run for a new record, their positive outlook on the year driven by regulatory tailwinds is still intact.
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