SpaceX Short Sellers Pocket $8.7B as Stock Dips Below IPO Price
Bearish investors have banked $8.7 billion as SpaceX shares fell below their $135 IPO price, driven by growing market anxiety over debt-fuelled artificial intelligence spending.
SpaceX shares dropped below their initial public offering price for the first time on Wednesday before clawing back to close just above the $135 threshold. The stock managed a modest recovery on Thursday, rising roughly 1% to $136.28. Despite this brief bout of strength, the stock remains sharply down from its post-IPO peak of $225.64.
This rapid descent from those highs has generated $8.7 billion in gains for short sellers. "SpaceX has been a rollercoaster for the short sellers, and it has ended up firmly in their favor," said Peter Hillerberg, co-founder of data analytics firm Ortex.
The magnitude of this bearish positioning is remarkable. Approximately 49% of SpaceX's tradable shares are currently out on loan. "We believe most of that is short selling," Hillerberg noted. Crucially, these traders did not close their positions as the price fell. "Rather than take profits, the bears kept adding the whole way down."
The downward pressure on the stock reflects a fundamental tension in the market. SpaceX's lofty valuation has always attracted skeptics, but recent selling has been compounded by broader investor anxiety regarding debt-funded artificial intelligence spending. Market participants appear to be reassessing the risk profiles of highly valued tech and infrastructure companies taking on significant leverage.
Taking a bearish stance against a company led by Elon Musk is inherently dangerous. His history of launching aggressive public campaigns against short sellers, combined with deep retail and institutional loyalty, means any positive catalyst could trigger a violent short squeeze. SpaceX did not immediately respond to a request for comment.
With nearly half the free float borrowed, the stock's price discovery mechanism is distorted. Ortex estimates that every single dollar of movement in SpaceX's share price now shifts more than $300 million in value for short-side holders. This massive leverage within the short community virtually guarantees that the stock will continue to experience severe, abrupt swings in either direction.
