Short sellers are aggressively betting against SpaceX, with bearish positioning reaching approximately 29% of the company's publicly tradable float, valued at about $25 billion. This surge from roughly 5% to 7% just three weeks prior coincides with the stock falling about 20% in July and briefly dipping below its initial public offering price of $135 for the first time. The stock recently traded around $131 per share. Ortex Technologies estimates short sellers are sitting on an $8.7 billion paper profit since the IPO.
The increase in short interest comes ahead of a significant lockup schedule. While Elon Musk's 42% stake is locked until June 2027, KeyBanc Capital Markets anticipates an 11% unlock of outstanding shares around the second-quarter earnings report, followed by additional 4% tranches after 70 days post-IPO and further unlocks tied to performance milestones and third-quarter earnings. The public float represents only about 5% of SpaceX's 13 billion outstanding shares, meaning the vast majority remain under lockup.
S3 Partners head of research Matthew Unterman noted continuous demand from short sellers building speculative positions since the IPO. The company's 13th Starship test flight, scheduled for Thursday, could influence stock sentiment. Although SpaceX's lofty valuation and Elon Musk's history of fighting short sellers make such bets risky, investor concern over debt-funded AI spending has contributed to the stock's weakness.
Nearly half, or 49%, of SpaceX's tradable shares are currently on loan, with Ortex co-founder Peter Hillerberg attributing most of this to short selling. He stated that despite the stock's volatility, it has ended firmly in favor of short sellers, who continued to add to their positions. The significant short position could lead to further volatility, as every dollar SpaceX shares move is estimated to be worth more than $300 million to short sellers.
