Key Takeaways:
About 206 million SpaceX shares are sold short, equal to 32% of the tradable float, according to S3 Partners estimates.
"The survival probability for firms holding major SpaceX short positions over time is very low," Musk said in a post on X late Monday.
The short position has grown from 5% to 7% of the float a month ago to 29% last week and now 32%, representing about $25 billion in bearish exposure. SpaceX shares traded at $123.54 Tuesday, up 3.1%, after falling for seven consecutive sessions that erased 21% of the stock's value. The stock remains below its $135 initial public offering price.
The elevated short interest sets up a potential squeeze ahead of SpaceX's first quarterly earnings report as a public company on Aug. 4. Adding to the pressure, the company will begin releasing large blocks of previously restricted shares next month, with insiders eligible to sell stock worth as much as $116 billion in the first phase of a staggered lock-up schedule.
The short-interest buildup reflects a divide between bulls betting on Starlink expansion and launch-service dominance and bears focused on valuation and the coming supply of unlocked shares. SpaceX has a market capitalization of about $1.58 trillion and trades at more than 600 times trailing earnings.
The company aborted a Falcon 9 mission carrying 24 Starlink satellites Monday and postponed its 13th Starship test flight to July 23 after an engine anomaly. The Falcon 9 has completed more than 80 successful missions in 2026.
Musk has a history of confronting short sellers. During Tesla's ascent, bearish traders lost approximately $27 billion since June 2021, according to S3 Partners data.
The Aug. 4 earnings report will determine whether the short crowding becomes a squeeze or a vindication. Investors will also watch the July 23 Starship test for a potential near-term catalyst.
This article is for informational purposes only and does not constitute investment advice.
