Short sellers have ramped up bets against SpaceX, with bearish positions now accounting for nearly a third of the company's public float as the stock struggles near its initial public offering price. According to S3 Partners, about 185 million shares are sold short, representing roughly 29% of the publicly tradable float and approximately $25 billion in wagers. This marks a sharp increase from an estimated 40 million shares, or 5% to 7% of the float, just three weeks ago.
Stock Slump and Lockup Concerns
SpaceX shares have fallen about 20% in July and briefly dipped below the $135 IPO price on Wednesday for the first time, last trading around $136. The surge in short interest comes ahead of a lockup expiration schedule that could significantly increase the number of tradable shares. KeyBanc Capital Markets notes that the initial float represented only about 5% of the company's roughly 13 billion outstanding shares, with the rest restricted.
The first major unlock could occur around the company's second-quarter earnings report, when about 11% of outstanding shares may become eligible for sale. Additional tranches of roughly 4% each are scheduled for release beginning around day 70 after the IPO, followed by further unlocks tied to performance milestones and third-quarter earnings. The largest block, Elon Musk's stake representing about 42% of shares, remains locked until June 2027.
Upcoming Catalyst
SpaceX's 13th Starship test flight is slated for Thursday, an event that could sway investor sentiment. "We are seeing continuous demand from short sellers building speculative positions since the IPO," said Matthew Unterman, head of research at S3 Partners, in an interview with CNBC.