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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
After years in the toilet, European stocks are back. Trump is threatening to withdraw US security guarantees, Europe’s defence spending is ramping up, and the continent’s once-beleaguered industrial champions are newly energised.
Also, meme stocks have crossed the pond:
A handful of European stocks have become a battleground for retail traders taking on hedge fund short sellers, in a campaign with echoes of the “meme stock” craze that gripped Wall Street during the Covid pandemic.
Companies including Germany’s Hensoldt and Renk Group and French satellite firm Eutelsat have surged in recent weeks, far outstripping a broader rally led by the defence sector as investors anticipate a surge in military spending across Europe.
And with them, Eurostonks memes galore. The rationale for this memetic explosion is understandable: after years as the underperforming Old World cousins, European stock enthusiasts finally have something to shout about.
Which left us with a crucial question: are the memes any good?
To find out, we scoured the nether regions of Europe’s trading forums on the FT’s dime. There’s good, there’s bad, and there are Porsche sports car/tank hybrids.
High on the Dax surge, the Germans — not usually known for their sense of humour — have been especially busy:
Look, we never said they were funny. War’s a tricky subject for comedy (also, VW is not building tanks, at least as far as we know. Although there is this).
Speaking of tanks, there’s lots of love for domestic stocks, but slightly less love for a certain American carmaker…
…which, to be fair, markets seem to agree with:
Or, as dramatically illustrated by our German friends below:
Or via this SpongeBob interpolation, captioned “Daily Meme until Tesla is under €100”:
Who are the heroes of this new meme trend? Well, Jensen Huang is out, Armin Papperger is in.
Will we ever seen Armin decked out in this?
The resurgence in European defence stocks has also rallied Deutschland’s finest AI “artists” to the cause. They’ve been busying themselves (presumably relying heavily on US technology in the process 🌝) by imagining how the country’s ailing automakers could reinvent themselves as military vehicle manufacturers.
We’re not tank designers, but somehow we’re not sure about these:
We have to admit though, the Deutz tractor tanks looks pretty cool. Who wouldn’t want to cruise through the fields in one of those bad boys? Investors agree:
It’s not just the Germany’s industrial mainstays that have been memified. Drone manufacturers have got the treatment too:
The less said about that, the better.
France’s Eutelsat has been a favourite of the meme brigade, with short sellers caught at the sharp end of the satellite maker’s rebound:
The nearly 300 per cent surge in Eutelsat has cost short sellers approximately $187mn in mark-to-market losses in the three weeks to March 14th, while Hensoldt short sellers have suffered $110mn in losses as its shares climbed 40 per cent in the same period, according to figures from S3 Partners.
. . .
BlackRock, the world’s biggest asset manager, also held significant shorts in Eutelsat, before trimming these below the disclosure threshold of 0.5 per cent in recent weeks. “BlackRock is now completely out,” one user gleefully informed the forum last week.
The pile-on reminds us of the Gamestop squeeze (immortalised in 2023’s truly awful Dumb Money movie) in its fervent anti-short rhetoric and calls to pump up the prices of certain stocks. Here’s MainFT again:
One user said: “On this wonderful day I’ve gone long Renk. I hope that the lights go on in the fat cats’ heads and that they see what is soon going to happen here.”
Marshall Wace, Qube, Darsana, Millennium and BlackRock declined to comment.
And:
“I don’t care about the profit, I just want to pool some of my money to help, and move away from US assets & asset managers,” wrote one poster on Reddit’s r/eupersonalfinance forum.
One might think this newfound European rizz would promote some intercontinental camaraderie.
But apparently some Germans aren’t happy:
Ah well, can’t please everyone. ¯\_(ツ)_/¯ A truly united Europe remains a distant dream, for now.
Further listening:
— Ode to Joy (YouTube)
