Why short sellers are piling on the SpaceX stock price

Short sellers are rapidly increasing bets against SpaceX as the SpaceX stock price falls below its $135 IPO level weeks after a record debut. Roughly 30% of the tradable float is now borrowed for shorts, while a scrubbed Starship flight and looming share lockups add pressure.

Key Takeaways

• Short interest has climbed to about 30% of SpaceX's tradable float, up sharply in recent weeks.
• The SpaceX stock price has slipped below its $135 IPO price and remains far under its post-debut peak near $225.
• A scrubbed Starship test flight and expected August lockup share supply are fueling bearish bets.
• Credit markets are also flashing caution, with SpaceX bond yields and CDS spreads rising.

Just weeks after SpaceX completed a record initial public offering, traders are betting against the company with unusual intensity. Reporting from Barron's, the Financial Times, and related market coverage points to crowded short positioning as shares reverse their early rally.

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How bad has the SpaceX stock price slide become?

SpaceX listed near a roughly $2 trillion valuation after raising about $86 billion in what the Financial Times described as the biggest IPO on record. Shares later fell below the $135 listing price and closed as low as about $124, down roughly 40% from a mid-June intraday high near $225.

That reversal turned a momentum favorite into a broken IPO narrative for some investors. Monday brought another soft session as selling continued after last week's losses.

Why are short sellers piling on so quickly?

Data cited across market reports show about 30% of roughly 640 million tradable SpaceX shares borrowed for short sales—up around 10 percentage points in 10 days. Short sellers have booked billions in paper profits as the stock declined, according to S3 Partners figures highlighted in FT reporting.

Bears are also looking ahead to a potential release of about 900 million additional shares as soon as next month when some pre-IPO lockups expire. Concern that demand may not absorb that supply is prompting some holders to exit early. Barron's frames the surge in shorts around valuation skepticism as the stock keeps falling.

Did the Starship scrub trigger Monday's drop?

Last week SpaceX scrubbed Starship Test Flight 13 after multiple engines failed to ignite, an automatic abort that weighed on sentiment. Shares closed the week below $124 and kept sliding Monday even after the company pointed to a fresh Thursday launch window.

CEO Elon Musk said two Raptor engines would be replaced, with a probable retry early the following week. Investors still used the delay as a chance to reduce exposure while valuation debates intensify.

Bond markets echo the caution: yields on a 30-year SpaceX bond have risen toward 7.4% from about 6.7% at issuance, while credit-default swap spreads have widened—signals that traders are pricing more risk into both equity and debt.