A former Fidelity portfolio manager identified SpaceX and Tesla as the best targets for short-selling

George Noble, who previously managed the Fidelity Overseas Fund, believes that SpaceX and Tesla stocks are “among the best short positions on the market,” according to Business Insider. Meanwhile, other short sellers are backing off: following the sell-off, SpaceX shares rebounded by nearly 30% from their closing low.

The price target Noble set for the stocks of both of Elon Musk’s companies—around $30—implies a 79% drop for SpaceX and a 91% drop for Tesla. Following SpaceX’s IPO, the strategist predicted that its stock could fall by 50% by the end of the year. Noble also criticized Nasdaq’s decision to fast-track the rocket company’s inclusion in the Nasdaq 100: index-tracking passive funds were forced to buy its shares.

Noble explained that when selecting stocks to short, he looks for highly valued companies whose share prices are being driven up by social media hype and whose position is complicated by unfavorable macroeconomic conditions. “Now, shares of a $2 trillion company—whose market capitalization is roughly 90 times its annual revenue—have even ended up in some grandmother’s 401(k) retirement plan. This is outrageous,” said the financier (as quoted by Business Insider).

Noble has become even more pessimistic about Tesla after the electric-car maker’s second-quarter earnings fell significantly short of expectations. In January, he called these stocks the biggest bubble on the market, and now he believes that Musk’s influence on investors is waning. “The luster is fading. Tesla [shares] haven’t changed in five years. Profits are plummeting,” Noble said, adding that “the Musk premium” no longer applies.

Over the past five years—since August 17, 2021—Tesla’s stock, taking the stock split into account, has risen 54%. Noble may have been referring to the 2021 peak, from which the stock was down 16.5% at the close on August 14, 2026.

While Noble considers SpaceX one of the best short targets, some other players have already closed their positions. However, S3 Partners attributes only part of the threefold decline in the short interest over the week —from a peak of 34% to 11% as of August 12—to this: the figure also decreased due to an increase in the number of shares in free float following the expiration of the first phase of lock-up restrictions. As of August 6, an additional 911 million shares became available for trading—about 7% of all SpaceX shares—and the number of shares in free float rose from 639 million to more than 1.5 billion.

“Those who wanted to short the stock ran out of ammunition,” said Igor Dusaniwski, managing director of predictive analytics at S3 Partners, at the time. “It’s impossible to keep increasing the same position indefinitely” (as quoted by CNBC).

The supply will continue to grow. According to SpaceX’s IPO prospectus, another 319 million shares will be unlocked on August 20, followed by approximately 700 million in September and nearly as many in October. A sharp increase in the number of shares in free float could amplify price volatility and make it easier to borrow shares for short selling if pessimism returns, CNBC noted.

This article was AI-translated and verified by a human editor