Eutelsat Shareholders Face Significant Dilution as Capital Increase Concludes

The subscription period for Eutelsat's contentious capital increase closes today, Tuesday, casting a shadow over the satellite operator's shares. Despite the concurrent announcement of a key contract renewal with the beIN Media Group, investor focus remains fixed on the threat of substantial equity dilution. The stock is declining on heavy volume, approaching a critical technical support level.

The primary source of selling pressure is the wide gap between the current share price of approximately €2.05 and the deeply discounted subscription price for new shares of just €1.35. This steep discount creates a clear opportunity for arbitrage trades, mechanically generating significant downward pressure on the equity. Market participants fear a coming wave of new shares that could depress the price further following their allocation.

Sentiment has been further dampened by the actions of a major shareholder. According to market reports, the Japanese investment giant SoftBank, a significant Eutelsat stakeholder, sold a large block of subscription rights last week. Analysts interpret this move as a stark warning and a withdrawal of confidence in the company's current strategic direction. This loss of faith from a cornerstone investor has contributed to the stock's monthly decline of over 30 percent.

Should investors sell immediately? Or is it worth buying Eutelsat?

A Core Business Bright Spot Amid Financial Turmoil

Against this turbulent financial backdrop, Eutelsat has reported a positive operational development. The company has secured a five-year extension of its strategic partnership with the beIN Media Group, ensuring continued content broadcasting across the Middle East and North Africa. This revenue stabilization is critical for the firm's strategy. The traditional geostationary video segment must serve as a reliable cash generator to fund the costly integration of the OneWeb division and the expansion of its Low Earth Orbit (LEO) satellite constellation.

Near-Term Volatility and a Critical Price Level

Heightened volatility is expected to persist in the short term until the market fully absorbs the newly issued shares. From a technical analysis perspective, the €2.00 price level has now emerged as a crucial focal point. A sustained break below this threshold could accelerate a move toward the €1.35 subscription price. Meanwhile, investors will be watching closely to see if the freshly raised capital proves sufficient to advance the OneWeb expansion without further delays.