Short sellers have significantly ramped up their bets against Elon Musk’s SpaceX, according to recent data from analytics firm Ortex Technologies. This comes after the aerospace manufacturer and space transport services company, known for its rockets, spacecraft, and Starlink satellite internet constellation, experienced a share price drop following its market debut on June 12. Ortex reported on Wednesday that SpaceX’s short interest, representing the total number of shares sold short as a percentage of publicly available shares, has surged to 13%, a notable increase from 8% in the preceding session.
The substantial rise in short interest is particularly striking given the stock has only been publicly traded for a few weeks. Peter Hillerberg, co-founder of Ortex, told Reuters that such a rapid build-up is a clear signal that a growing number of traders are positioning for a sharp price decline. SpaceX shares have already fallen approximately 30% from their high of $225.64, scaled days after its debut, amidst a broader market selloff. Its considerable $2 trillion valuation also makes it an attractive target for those looking to profit from a potential share price dip.
Despite the increased short selling, the proposition remains a risky one for traders. Strong retail and institutional interest, coupled with CEO Elon Musk’s history of public battles against short sellers, adds a layer of unpredictability. Furthermore, while the cost to borrow SpaceX shares remains relatively cheap at about 1%, Ortex data indicates a potential vulnerability for short sellers. Hillerberg highlighted that SpaceX’s limited float size could make short sellers susceptible to a “squeeze” if shares were to unexpectedly rally, with forced buying potentially accelerating any upside movement well beyond fundamental justifications.
