Short sellers are rapidly increasing bearish bets against SpaceX, with short interest surging to nearly one-third of the company’s publicly tradable shares as investors position for further declines following the company’s blockbuster initial public offering.
About 185 million SpaceX shares are now sold short, representing approximately 29% of the company’s public float and roughly $25 billion worth of bearish positions, according to data from S3 Partners.
The increase has been dramatic. Just three weeks ago, an estimated 40 million shares, or roughly 5% to 7% of the float, were sold short.
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“We are seeing continuous demand from short sellers building speculative positions since the IPO,” Matthew Unterman, head of research at S3, told CNBC.
The sharp increase in short interest shows there is growing skepticism over SpaceX’s near-term valuation after the company’s highly anticipated public debut. While the IPO initially generated strong investor enthusiasm, the stock has since lost momentum, falling about 20% in July and briefly dropping below its $135 IPO price on Wednesday for the first time. Shares were last trading around $133.
One of the biggest concerns weighing on the stock is the approaching wave of lockup expirations, which could significantly expand the number of shares available for trading and increase selling pressure.
SpaceX floated only about 5% of its roughly 13 billion outstanding shares during its IPO, making the stock particularly sensitive to changes in supply. A relatively small public float means even modest selling activity can trigger outsized price swings, while the limited availability of shares has also made the stock attractive to short sellers.
According to KeyBanc Capital Markets, the first major lockup expiration is expected around the company’s second-quarter earnings release, when roughly 11% of outstanding shares could become eligible for sale.
Further lockup releases are expected in stages. Additional tranches representing about 4% of outstanding shares are scheduled to become available beginning around 70 days after the IPO, followed by more shares tied to performance milestones and the company’s third-quarter earnings report.
The largest insider holding remains locked up. Chief Executive Elon Musk’s stake, which accounts for about 42% of SpaceX’s outstanding shares, cannot be sold until June 2027, limiting the immediate risk of a large insider disposal but leaving a substantial future supply overhang.
The rising short interest is seen as an indication of a common dynamic following high-profile IPOs with limited public floats. Traders often anticipate that lockup expirations will increase share supply, potentially weighing on prices as early investors, employees, and insiders gain the ability to monetize their holdings.
Beyond technical factors, investors are also assessing whether SpaceX’s valuation adequately reflects its long-term growth ambitions. The company raised a record $75 billion in its IPO, pitching investors on businesses that extend beyond launch services, including satellite broadband through Starlink, enterprise artificial intelligence applications, and plans to deploy data centers in space.
Those initiatives have helped position SpaceX as a play on multiple high-growth technology themes, including AI infrastructure, cloud computing and next-generation communications. However, they also require substantial capital spending and execution over several years, making the stock vulnerable to shifts in investor sentiment toward high-growth companies.
Attention is now turning to operational catalysts that could influence trading. SpaceX’s 13th Starship test flight is scheduled for Thursday, providing investors with an opportunity to assess progress on one of the company’s flagship programs. Successful missions could improve sentiment, while technical setbacks may reinforce concerns already reflected in the rapidly growing short positions.
The unusually high level of short interest also raises the possibility of heightened volatility. With nearly one-third of the public float now sold short, positive operational developments, stronger-than-expected financial results, or favorable news around Starlink or AI initiatives could trigger a short squeeze, forcing bearish investors to buy back shares and potentially accelerating gains.
Conversely, disappointing execution or heavier-than-expected selling following upcoming lockup expirations could validate the current bearish positioning and add further downward pressure to the stock.