A commitment of one euro can end up being very profitable. It only remains that the world becomes a much more dangerous place and that the US tells Europe to start paying its own defense. It is what has happened with an Austrian motion manufacturer in difficulties that has now become one of the most attractive investments in Europe thanks to the rise of defense values.
The German risk capital company Mutares paid the symbolic price of one euro per Steyr Motors In 2022 and is now reaping the benefits, both for the increase of 1,600% of Steyr’s shares and for their own actions, which have doubled in just six months.
Movements are a testimony of the impulse behind military actions. Under the presidency of Donald Trump, the US is withdrawing its security commitment to Europe, which has led countries to increase armament spending. With US actions in difficulties and Europe as the fashion market of the moment, everyone, from the operators of the day to the coverage fund managers, has been buying anything with a military angle. “The defense story has shot and the main institutional and thematic funds have to align with it: there is simply not enough paper,” says Jayadev Mishra, portfolio manager at Bank J Safra Sarasin.
Steyr, which manufactures tanks and ships enginesin the Austrian city that gives its name to the company, it was launched to the Frankfort Stock Exchange in October after a private placement to 14 euros the action, just in time for the investor frenzy of the beginning of 2025 for everything related to the defense. At its peak last week, Steyr shares closed to 240 euros, 1,614% more than the placement price five months before. Mutares, which still has 71% of Steyr, has shot together with it, more than double since its minimum in September, when the investment company defended itself from a critical report of the short seller Gotham City Research, known in Spain for its attacks against Grifols.
Both values have turned a bit to the ground. Last week, Mutares announced his intention to sell part of his Steyr shares, which caused a collapse of motor manufacturer shares up to 62 euros. However, Steyr continues to rise 343% from the private placement price, while Mutares is 65% above its minimum of 2023.
Mutares Steyr bought from the French defense contractor Thaleswhich in turn had acquired the company three years before. The Munich -based acquisition company specializes in the purchase of companies that have stumbled and need a ‘twist’. Mutares launched what he called “a very fast operational change” in Steyr before quoting on the stock market in October.
One of the reasons why Steyr’s shares have risen so is that the company is small, with a market value of 322 million euro, and The offer of shares is limited given the size of the participation of mutares. On average, about 64,000 euros of shares changed hands every day in the first three months of Steyr as a quoted company. The sale of more shares will improve the liquidity of the value, says Mutares. The German company says it intends to remain an important shareholder.
The Steyr diesel engines are used in the US Navy Seals boatsthe main special operations of the US Navy, and as Auxiliary power in leopard 2 tanks. Steyr expects its sales to increase at least 40% in 2025, with a margin of benefits of at least 20%. “We do not see a direct impact of the evolution of the price of shares, apart from the immense media attention,” explains the CEO of Steyr, Julian Cassutti, in a statement sent by email. “The trajectory has been somewhat surreal, but ultimately is a product of the market.”
The interest of investors by the company has increased due to its good operational results and Germany’s decision to increase defense spending, adds Cassutti. Steyr is even object of an lively debate in the Reddit chats how much can the Rally. “Until my hairdresser tells me, so it will be time to sell,” writes a user. “As soon as my father told me, he began to go down,” says another.
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