Short Sellers Surge Against SpaceX, Betting Against Musk Amid Stock Slump

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. About 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 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.

The surge in short interest comes as SpaceX shares have struggled after an initially strong debut. The stock has fallen about 20% in July and briefly slipped below its $135 IPO price on Wednesday for the first time. The stock last traded around $131 apiece on Thursday.

SpaceX’s IPO on June 12, 2026, was met with significant investor interest, with the company raising $1.7 billion at an initial valuation of $34 billion. However, the post-IPO performance has been a stark contrast to the early optimism. The company’s stock, traded under the ticker symbol SPCX, has experienced a significant downturn in the weeks following its public debut. This decline has been exacerbated by a notable increase in short selling activity, a strategy where investors bet on a stock’s price to fall.

The magnitude of the short interest is particularly striking. As of recent reports, approximately 185 million SpaceX shares have been sold short. This represents a substantial 29% of the company’s publicly available shares, known as the float. The total value of these bearish wagers is estimated to be around $25 billion, a staggering sum that underscores the extent of negative sentiment among a significant portion of the market.

This level of bearish positioning is a dramatic shift from just three weeks prior. At that time, short interest was estimated to be around 40 million shares, constituting a much smaller 5% to 7% of the float. The rapid escalation suggests that a growing number of investors are actively seeking to profit from an anticipated decline in SpaceX’s stock price.

Matthew Unterman, head of research at S3 Partners, a financial analytics firm that tracks short interest, commented on the trend. "We are seeing continuous demand from short sellers building speculative positions since the IPO," he stated. This indicates that the increased shorting is not a fleeting event but a sustained strategy being employed by market participants.

The primary driver behind this bearish sentiment appears to be the underperformance of SpaceX’s stock since its IPO. After an initial positive reception, the stock has encountered significant headwinds. In July alone, the shares have depreciated by approximately 20%. The most recent development, a brief dip below the IPO price of $135 on Wednesday, marks a critical psychological and technical barrier breached, signaling potential further weakness. The stock’s closing price on Thursday around $131 per share further confirms this downward trajectory.

Several factors may be contributing to the struggles of SpaceX’s stock and, consequently, the rise of short sellers. One of the most significant upcoming events is the expiration of lockup periods for a substantial portion of the company’s shares. Following an IPO, company insiders and early investors are typically restricted from selling their shares for a specified period. These restrictions, known as lockup agreements, are designed to prevent a flood of shares from entering the market immediately after the IPO, which could depress the stock price.

SpaceX’s IPO float represented a relatively small percentage of its total outstanding shares, estimated at around 5% of its roughly 13 billion shares. This implies that the vast majority of the company’s stock remains subject to these lockup restrictions. As these periods expire, a significant increase in the number of shares available for trading is anticipated, potentially intensifying selling pressure.

KeyBanc Capital Markets has provided insights into the potential timing and impact of these unlocks. The firm estimates that the first major unlock could occur around the company’s second-quarter earnings report. This event could make approximately 11% of the company’s outstanding shares eligible for sale.

Further tranches of shares are slated for release in the subsequent months. KeyBanc predicts additional unlocks of roughly 4% each, beginning around Day 70 after the IPO. Further releases are also tied to the company’s performance milestones and its third-quarter earnings report.

The largest single block of shares, and thus a key focus of upcoming unlocks, belongs to SpaceX CEO Elon Musk. His stake represents approximately 42% of the company’s outstanding shares. However, Musk’s shares are subject to a longer lockup period, extending until June 2027. This extended restriction means his substantial holdings will not be immediately available for sale, potentially influencing the market’s perception of immediate supply pressures.

In addition to the market dynamics and lockup schedules, upcoming company events can also influence investor sentiment. SpaceX’s 13th Starship test flight is scheduled for Thursday. The success or failure of this critical test flight could serve as a significant catalyst, impacting both positive and negative sentiment towards the company’s stock. A successful test flight could bolster confidence in SpaceX’s technological advancements and future prospects, potentially providing a tailwind for the stock. Conversely, any setbacks or failures could further exacerbate the current bearish sentiment and provide additional ammunition for short sellers.

The confluence of a declining stock price, a rapidly increasing short interest, and the looming expirations of lockup agreements creates a complex and potentially volatile environment for SpaceX shares. The market will be closely watching the outcomes of the Starship test flight and the progression of share unlocks to gauge the future direction of SPCX. The substantial bearish bets placed by short sellers indicate a significant segment of the market believes the current stock price is unsustainable, setting the stage for potential price movements as these events unfold.