Short sellers have taken positions against nearly a third of SpaceX's outstanding shares. Should we expect a sell-off?
On August 4, SpaceX plans to release its first quarterly report as a publicly traded company—after which insiders and early investors will be able to sell up to $116 billion worth of the company’s securities, according to Bloomberg
In August, following the release of the company’s first quarterly report since its IPO, insiders and early investors will be able to sell 911.5 million SpaceX shares worth approximately $116 billion / Photo: X / SpaceX
There are about 206 million shares of SpaceX held in short positions—that’s roughly 32% of the total number of shares in public circulation (free float), according to CNBC. Thus, “bear bets” against Elon Musk’s space company total about $25 billion, the network reports, citing estimates from S3 Partners. By comparison, just last week the figure was about 185 million shares, or 29% of the free float, and about a month ago, it was approximately 40 million shares, or 5–7% of the free float.
What's going on?
“We continue to see short sellers increasing their exposure ahead of several key upcoming events, including the company’s first report as a public company and the subsequent expiration of lock-up periods,” S3 Research Director Matthew Unterman told CNBC, referring to the imminent release of shares held by insiders.
“The likelihood of survival for firms that maintain a significant short position in SpaceX for a long time is very low,” wrote Elon Musk, the company’s CEO and majority owner, in a post on X, responding to reports of rising short interest. “I said that SpaceX would be worth more than Earth if we achieve our goals. This is obviously true.”
As early as next month, insiders and early investors will be able to sell up to $116 billion worth of SpaceX shares, according to Bloomberg: 911.5 million shares will be unlocked on August 6. The restrictions will end two days after SpaceX releases its quarterly results. After the close of regular trading on August 4, Musk’s space and AI company will release its first report as a public company. These results will give investors their first detailed look at SpaceX’s performance since its IPO and could serve as a new test for both “bulls” and “bears,” notes CNBC.
During Tuesday’s trading session, SpaceX shares rose 3.3% to $123.8, ending a seven-day losing streak. This marked the largest one-day gain for Musk’s company’s stock since June 30, notes MarketWatch. However, compared to its peak reached in mid-June ($225.64 per share), SpaceX shares are still trading 45% lower.
What Analysts Are Saying
The recent decline in SpaceX’s stock price has created a buying opportunity, according to Macquarie, led by strategist Paul Golding. In a note to clients on July 20, the firm’s analysts wrote that SpaceX’s “fundamentals” have remained virtually unchanged, despite the fact that its stock has suffered significant losses: “We believe the decline [in SpaceX shares] offers an opportunity to gain exposure to a leader in launches, communications, and space infrastructure,” Golding added. Macquarie has assigned SpaceX shares an “outperform” rating with a price target of $250 per share.
Overall, Wall Street views the outlook for Musk’s space and AI company positively: 28 analysts recommend buying SpaceX stock, six advise holding it, and two recommend selling it (Underweight and Sell ratings). The average target price—$240.65 per share—implies a 94% increase in SpaceX’s stock price relative to its most recent closing price.
This article was AI-translated and verified by a human editor
