(BFM Stock Exchange) – Several titles in Europe are experiencing spectacular increases that have been accelerated by coordinated actions from small carriers. This phenomenon is reminiscent of the “same” stocks of 2021 in the United States, even if the comparison has its limits.

It floats like an American perfume of 2021 on European scholarships in recent weeks. Several average capitalizations have experienced spectacular flights in just a few days.

Defense groups have jumped and Satellite Eutelsat and SES operators (a Luxembourg company) have taken 121% and 43% since the end of February. These impressive movements have been amplified because they are called “squeeze shorts”.

Investors who had “blocked” these values, that is to say that they had sold them uncovered (by borrowing the titles) reduced their positions or even discovered them, taken on the reverse by the increase in the values ​​in question. For this, the funds were forced to buy the actions, which therefore contributed to the flight of these values.

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“Squeeze shorts”

Partly particularly crisp: it would seem that these “Squeeze shorts” were at least partly caused by private investors.

Quoted by Reuters in early March, the KéPler Cheuvreux broker said that bets with leverage from private investors had amplified the increase in Eutelsat. Which had then forced the sellers discovered to cover the positions.

Képler’s observation was based on intense discussions around Eutelsat in the Boursorama forums.

On X (ex-Twitter), user Johannesborgen, which follows with acuity the banking and scholarship movements, draws up a fairly similar observation.

He believes that the “Redditors” (users of the Reddit platform) have “a game game” with Eutelsat. The user notes, again, an important activity on “Wallstreetbetger”, a Reddit channel in German dedicated to the Stock Exchange.

Képler Cheuvreux also talks about a ” of the Gamesop effect” with Eutelstat.

As a reminder, GameStop, an American video game store chain had set up spearhead of the wave of “same stocks” in the United States which occurred in 2021. US private investors have gone on the stock market forums to massively buy business titles, thus creating a buyer tsunami.

The open sellers, very numerous on these titles, had been trapped and forced to unclog their positions with losses. Besides GameStop, this phenomenon had concerned the operator of Cinemas AMC or the manufacturer of BlackBerry phones. The rise of the Robinhood trading platform and the appearance of many individual traders during the pandemic had formed the large ingredients at the origin of these movements.

In a recent article, the Financial Times reports that in addition to Eutelsat, German companies Renk (+133% over three months) and Hensoldt (+96% over the same period) were also affected by this recent phenomenon in Europe. The British daily quotes funds that have reduced their exposed sales positions on Renk and internet users on German value on Reddit.

The Financial Times also questioned trading platforms for individuals. The German FlexDegiro indicates on a daily basis that the exchanges on Eutelsat were 70 times stronger than usual over the last month, multiple which is established four for Renk. The Briton Etoro, for his part, indicates to the Financial Times that the traders opened 18 times more positions on Hensoldt during the last month than in the previous month.

A comparison to nuance

All this therefore recalls the phenomenon of “same stocks” of 2021 in the United States. But is comparison right?

“Particular investors do not have the same weight in Europe as in the United States and are not as numerous,” recalls Frédéric Rozier, portfolio manager at Mirabaud.

“Admittedly, there was clearly ‘Short Squeeze’ on Eutelsat, the private sellers have reduced their positions and this has been carried by individuals. Now unlike Gamesop, and this is also worth for Renk and Hensoldt, there is a story, a trigger which explains the increase in the title on Eutelsat”, continues the manager. Which was not the case with GameStop.

“In the case of the satellite operator it is the will of Europeans to become independent of Starlink. For Renk, Hensoldt, these are the increases in defense budgets in Europe,” he concluded.

The increase in Eutelsat, a value that has also been massacred since its merger with the British Oneweb (-64% over three years) has, in fact, above all fueled by anticipations of additional orders, to bypass the Starlink system of Elon Musk in Europe.

“In the past two days, the Eutelsat share price went from 1.20 euros to 3.57 euros (+197 %), since Eutelsat (with its European counterparts) could provide additional satellite connectivity in Ukraine and constitute a credible alternative to Starlink”, noted Deutsche Bank in early March.

As for Renk and Hensoldt, these two titles benefited from the multiple announcements of European leaders in defense expenditure increases.

In Germany for example, parliamentarians last week approved changes in budgetary rules necessary to implement an investment plan of several hundred billion euros in defense and infrastructure. While NATO rules recommend a threshold of 2% of gross domestic product (GDP) for military spending, several European leaders mentioned targets of 3% -4% or even 5%.

However, Renk produces gearboxes and transmission systems for military vehicles and ships of Marines and Hensoldt is a specialist in sensors and military optronics.

A elsewhere, the Financial Times notes that none of these European groups has reached the stratospheric valuations that Gamesop had known in 2021.

Contacted, Eutelsat told News Bulletin 247 not to be “in a position to comment on the movements of our stock market course”.