Shares Of European Starlink Rival Up 500% As Doubts About Musk Grow

Shares of Eutelsat, a European-based competitor to Starlink, have skyrocketed as doubts grow about owner Elon Musk's and his collaborator Donald Trump's loyalty to democracy and to Europe versus their allegiance to Putin.

The effect could be similar to plunging European - as well as American and Canadian - sales of Tesla cars due to Musk's increasingly right wing political behavior. European governments do not want to give Musk that much influence over crucial electronic communications so are likely to spread their risk by giving more contracts to Eutelsat and other companies. JL 

Matthew Loh reports in Business Insider:

French satellite provider Eutelsat's shares have skyrocketed amid concerns that Ukraine's access to Starlink may be under threat. By Wednesday at market close, the stock had reached $8.34 — a 533% jump from the start of the week. With that increase, the company is worth $4.02 billion. Eutelsat merged with a UK-based Starlink competitor, OneWeb, in 2023. The satellite firm has come to the fore as European leaders are bolstering defense spending while raising the possibility that they could fill gaps in Ukraine's internet access. Eutelsat's stock boost comes as European defense manufacturing shares surged due to the recent strain on US relations with its traditional allies and Ukraine.

French satellite provider Eutelsat's shares have skyrocketed amid concerns that Ukraine's access to Starlink may be under threat.

 

Eutelsat shares on the Paris exchange surged 68% on Monday before jumping another 123% the next morning to $4.77.

By Wednesday at market close, the stock had reached $8.34 — a 533% jump from the start of the week. With that increase, the company is worth $4.02 billion.

 

The leap comes as the US suspended aid to Ukraine on Monday, prompting fears of disruptions to capabilities like advanced American air defenses and internet access on the battlefield.

Starlink, owned by Elon Musk's SpaceX, has been a vital internet provider for Ukraine's military, and the loss of its services would be a severe blow to Kyiv's communications and drone operations.

That's key for Eutelsat, which merged with a UK-based Starlink competitor, OneWeb, in 2023.

 

The satellite firm has come to the fore as European leaders say they're bolstering defense spending while raising the possibility that they could seek to fill any gaps in Ukraine's internet access.

As its share price rose, a spokesperson for the company told Reuters it was discussing with the European Union how it might contribute to Ukraine's internet access.

In a statement to Business Insider, a spokesperson for Eutelsat said the company "offers the same capabilities as Starlink in terms of coverage and latency" in Europe.

 

"We are actively collaborating with European institutions and business partners to enable the swift deployment of additional user terminals for critical missions and infrastructure," the spokesperson said.

Despite the jump this week, Eutelstat's shares are still far below its past highs. Its stock reached about $33 in mid-2015 and has steadily declined in the last decade.

The company suffered as its legacy operations, which relied more heavily on satellites in Earth's higher orbit, were increasingly eclipsed by the growing popularity of low-Earth-orbit satellites like Starlink's.

 

However, Eutelsat's recent merger with OneWeb now gives it a constellation of low-Earth orbit satellites to compete with.

No official sign yet that Starlink will disappear

Meanwhile, it's unclear whether Ukraine's Starlink access is at risk.

Musk, a close ally of President Donald Trump, denied a Reuters report from late February that said US officials discussed cutting off Starlink from Kyiv if it rejected a minerals deal with Washington.

 

And while the US partially pays for Ukraine's Starlink subscription, European countries also fund many terminals. Poland, which pays for about half of Ukraine's Starlink terminals, said it would continue to fund them.

Through OneWeb, Eutelsat is also already providing some satellite services to Ukraine's governments and institutions, but it only has about one-tenth of Starlink's satellites. Its constellation has fewer than 700 satellites, while Starlink runs over 7,000.

The European company operates 35 Geo satellites, which orbit at 21,000 miles above Earth, and about 630 low-Earth orbit satellites, which orbit at about 750 miles above Earth.

 

While internet terminals typically rely on low-earth orbit satellites because they are closer to Earth's surface, Eutelsat's spokesperson told BI that the 35 Geo satellites could also help bolster Ukraine's internet capacity.

On Sunday, European Commission spokesperson Thomas Regnier told reporters regional leaders were considering giving Ukraine access to GovSatCom as an alternative.

The system is a shared network of satellites already owned by European member states.

 

Eutelsat's momentary stock boost also comes as European defense manufacturing shares surged due to the recent strain on US relations with its traditional allies and Ukraine.

Ursula von der Leyen, president of the European Commission, announced on Tuesday that European leaders would push to allocate 800 billion euros, or about $840 billion, to their defense spending collectively.