Gamestop effect": retail traders seen behind Eutelsat's 650% surge

By Danilo Masoni and Gianluca Lo Nostro

MILAN (Reuters) - Shares successful Franco-British outer relation Eutelsat roseate connected Thursday, bringing gains implicit 4 days to adjacent 650% successful a rally that bears the hallmarks of retail traders amplifying moves connected a highly shorted stock.

Suggestions the institution could regenerate Elon Musk's Starlink successful providing net entree to war-torn Ukraine person fuelled a turnaround successful sentiment this week for a banal that had been languishing astatine grounds lows.

After a six-fold summation successful the erstwhile 3 sessions, its shares roseate different 18% connected Thursday, valuing it implicit 4 cardinal euros ($4.3 billion) earlier retreating slightly. By 1019 GMT, they were down 12% successful a 4th time of dense trading volumes.

"This is simply a classical abbreviated compression of comparatively unheard-of proportions, but to beryllium fair, proportionate to the tectonic shifts we spot successful planetary geopolitics since the predetermination of Trump," Bernstein expert Aleksander Peterc said.

The rally started aft Friday's nationalist enactment betwixt Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump, aft which Washington paused subject assistance to Ukraine.

Kepler Cheuvreux said leveraged bets by idiosyncratic investors mightiness person amplified the swings, triggering immense abbreviated covering and creating a "French mentation of the Gamestop effect".

Video crippled retailer Gamestop was astatine the centre of 2021's alleged "meme stock" rally connected Wall Street, erstwhile banal influencer Keith Gill's bullish bets sparked a trading frenzy among mom-and-pop investors.

The French broker noted aggravated treatment connected Boursorama's Retail forum successful France. The frenzy besides seemed to drawback idiosyncratic investors elsewhere successful Europe.

On Germany's Tradegate, a fashionable venue for retail traders, Eutelsat has been 1 of the astir executed orders this week. On Thursday, it ranked archetypal up of defence stocks Rheinmetall and Hensoldt.

"Eutelsat is simply a banal that retail traders like," said Stephane Ekolo, equity strategist astatine TFS Derivatives successful London. "Hedge funds were abbreviated that banal and we are witnessing a abbreviated compression carnage."

Eutelsat declined to remark connected its stock terms performance.

In January, Moody's chopped Eutelsat's standing further into junk territory, citing underperformance of its OneWeb satellites and unit connected currency travel fixed important concern needs.

"The stock terms reflects a anticipation that Europe is going to present much enactment to Eutelsat, nary of the cardinal economics that had led its stock terms to go truthful depressed person dissipated," said Hamish Low astatine Enders Analysis.