A European Starlink rival’s shares skyrocketed 390% in a week

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.