Short-selling bets against SpaceX, the company led by Elon Musk, have swelled to a record high, surpassing Tesla. The surge is seen as the result of investors rapidly increasing wagers on a stock decline as the company's first quarterly earnings report and the expiry of an insider lockup approach.
According to financial analytics firm S3 Partners on the 3rd, SpaceX's notional short interest stood at about $23.6 billion (about 33.7 trillion won), exceeding Tesla's roughly $22 billion. The number of shares tied up in short positions reached about 206 million, or 32.2% of total tradable float. Given that short volume immediately after the June listing was about 40 million shares, or 5% to 7% of tradable float, the proportion has jumped sharply in just two months.
The schedule is also aligned in favor of short sellers. SpaceX will disclose its first quarterly earnings since listing after the U.S. regular session closes on the 4th, and its first lockup expiry is scheduled for the 6th. The New York Times (NYT) pointed to this timing as a key variable, forecasting that "once the first sale restriction period on SpaceX shares is lifted, the stock could fall further, having already dropped nearly 50% from the high it surged to right after the listing."
The largest block, 1.3 billion shares, will have its sale restriction lifted after the third-quarter earnings report this fall. By contrast, CEO Musk, the largest shareholder holding more than 640 million shares, cannot sell most of his stake until June 2027.
The NYT also drew attention to trends among a group of about 1,200 former SpaceX employees. The value of shares they hold is estimated at a minimum of $1 billion (about 1.4318 trillion won), and one former employee expressed anxiety over having assets concentrated in a single stock and signaled an intention to diversify.
The actual scale of selling is expected to hinge on the second-quarter earnings to be released on the 4th. The market is focused on the development progress of the next-generation spacecraft Starship and on the spending and performance of the artificial intelligence (AI) division under SpaceX.
The stock's trajectory reveals the backdrop for the rise in bearish bets. Debuting on the Nasdaq at an IPO price of $135 on June 12, SpaceX shares closed at $160.95 on the first day of trading and rose to as high as $225.64 intraday on June 16. A decline followed, and the closing price on the 3rd was $113.53, 46% below the June high.
CNBC, citing S3 Partners, said "the scale of short-selling contracts related to SpaceX is at an all-time high," explaining that "short selling is a transaction in which one borrows and sells shares one does not own, then repays them later, structured to profit when the stock falls."
