Short Sellers Ramp Up Bets Against SpaceX as Stock Faces Pressure

A live feed shows SpaceX CEO Elon Musk on the day of SpaceX’s initial public offering (IPO) at the Nasdaq MarketSite, in New York City, U.S., June 12, 2026. Jeenah Moon | Reuters

Short sellers are rapidly increasing their bets against SpaceX, driving bearish positioning to nearly one-third of the company’s public float as the struggling stock hovers below its IPO offering price. Approximately 185 million SpaceX shares are now sold short, representing roughly 29% of the company’s publicly tradable float and about $25 billion in bearish wagers, according to S3 Partners. This position has significantly ballooned from an estimated 40 million shares, or roughly 5% to 7% of the float, just three weeks ago.

"We are seeing continuous demand from short sellers building speculative positions since the IPO," Matthew Unterman, head of research at S3, told CNBC. This surge in short interest comes as SpaceX shares have struggled following an initially strong debut. The stock has fallen approximately 20% in July and briefly slipped below its $135 IPO price on Wednesday for the first time. On Thursday, the stock last traded around $131 per share.

The bearish positioning comes ahead of a closely watched lockup schedule that could substantially increase the number of shares available for trading over the coming months. SpaceX’s initial public float represented only about 5% of its roughly 13 billion shares outstanding, leaving the vast majority of stock still subject to lockup restrictions, according to KeyBanc Capital Markets.

KeyBanc estimated that 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 to be released beginning around Day 70 after the initial public offering, followed by further unlocks tied to performance milestones and third-quarter earnings, the firm stated.

The largest block of shares remains Elon Musk’s stake, representing about 42% of shares outstanding, which is locked up until June 2027.

The company’s 13th Starship test flight is slated for Thursday, a potential catalyst that could influence sentiment toward the shares. This flight is a critical development for SpaceX, as it represents the next step in the company’s ambitious program to develop a fully reusable heavy-lift launch vehicle capable of carrying both crew and cargo to Earth orbit, the Moon, and eventually Mars. Each test flight provides invaluable data that informs future design iterations and operational strategies. The success or failure of this mission, and the subsequent analysis of its performance, will undoubtedly be scrutinized by investors and the broader market, potentially impacting the stock’s trajectory.

The significant increase in short interest signals a growing conviction among some market participants that SpaceX’s current valuation may be overextended or that the company faces considerable headwinds. Short sellers profit when a stock’s price declines, as they borrow shares to sell them and then aim to buy them back at a lower price to return to the lender. The escalating short positions suggest a belief that the stock price is likely to fall further.

Several factors could be contributing to this bearish sentiment. While SpaceX has achieved remarkable successes in the reusable rocket market and secured significant contracts with NASA and other commercial entities, the company’s valuation in its initial public offering was already exceptionally high, reflecting ambitious growth expectations. The market may be questioning the sustainability of these growth rates, especially in light of potential competition and the long-term capital-intensive nature of space exploration and satellite internet ventures.

Furthermore, the sheer volume of shares subject to lockup expiration presents a potential overhang on the stock. As these restrictions lift, a larger supply of shares will become available for trading, which could exert downward pressure on the stock price if demand does not keep pace. The timing of these unlocks, particularly the significant portion expected around the second-quarter earnings report, is a key event to monitor.

The company’s Starlink satellite internet constellation, while a promising revenue stream, also requires substantial ongoing investment in satellite deployment and ground infrastructure. The profitability and long-term competitive advantage of Starlink in an increasingly crowded market are subjects of ongoing debate.

SpaceX’s ambition extends beyond launch services and satellite internet. The company is also pursuing lunar missions, human spaceflight, and the long-term goal of colonizing Mars. While these endeavors represent significant future growth potential, they also entail substantial risks and require continuous, large-scale capital allocation, which can be a source of investor concern.

The market’s reaction to the upcoming Starship test flight will be a crucial indicator of investor sentiment. A successful flight, demonstrating progress in the development of the vehicle’s capabilities and reliability, could help to assuage some bearish concerns and potentially bolster the stock price. Conversely, any significant setbacks or failures could exacerbate existing downward pressure and embolden short sellers.

The interplay between the company’s operational performance, the upcoming lockup expirations, and broader market conditions will likely dictate the near-term direction of SpaceX’s stock. The increasing short interest highlights the divided sentiment surrounding the company, with some investors betting on continued growth and innovation, while others are positioning for a potential correction.