Washington’s shifting tone on the war in Ukraine is reverberating through Europe’s defense sector, with shares of Theon International Plc tumbling to a four-month low. The Greek defense electronics group closed at €23.50 on the Euronext exchange on Tuesday, down 8.74 percent on the day. The slide has wiped out recent gains and brought the stock to its lowest point since April, raising fresh worries among investors.
The losses are particularly painful for those who participated in Theon’s June 4 share placement at €31.10, who are now facing a decline of more than 24 percent. Investors who bought at the company’s record high of €34.95 only weeks ago are seeing their positions down by nearly a third.
What makes the downturn more striking is that it comes amid a flurry of expansion moves by the company. Theon recently committed $15 million to U.S.-based Kopin Corporation in an effort to accelerate innovation across the global defense industry. It also completed the acquisition of Germany’s Kappa Optronics, reinforcing its presence in electro-optical systems.
Despite these strategic steps, the market remains unconvinced, with attention now turning to September 2, when chief executive Christian Hadjiminass will unveil first-half 2025 results.
Theon’s struggles are part of a wider sell-off in Europe’s defense stocks. The Stoxx Europe Aerospace and Defense index fell 2.2 percent on Monday, with Germany’s Renk down 6.7 percent, Italy’s Leonardo off 6.6 percent, Hensoldt sliding 6 percent, and Sweden’s Saab losing 5.5 percent.
Analysts say the downturn has been triggered by signals from Washington suggesting a change in approach to the conflict in Ukraine. Former U.S. president Donald Trump, who has dominated debate over future American foreign policy, indicated he would consider peace talks even as fighting continues, a departure from earlier calls for an immediate ceasefire. He also trailed plans for a package of security guarantees for Kyiv, coordinated with European partners. Ukrainian president Volodymyr Zelensky said the details of this package - likely to include significant orders of American weapons systems - would be formalized in writing within the next ten days.
