SpaceX (SPCX) is confronting its most severe test since going public. On the eve of both its first quarterly earnings release and the largest lock-up expiration in history, Wall Street short sellers have gathered aggressively, pushing the company into one of the most heavily shorted stocks in the United States, with 219.3 million shares sold short. The core thesis of the short sellers points directly to the massive market-value unlock scheduled for August 6, with expectations that a flood of shares entering the public market will create sustained supply-side pressure on the stock price.
According to the latest data from S3 Partners, as of July 29, short interest in SpaceX had surged to 219.3 million shares, representing approximately 34 percent of publicly traded shares, with a notional value of 24.6 billion US dollars. This scale has already surpassed Tesla, making SpaceX one of the most heavily shorted large-cap companies in the U.S. market. Short interest has increased nearly tenfold from the 23.3 million shares seen in the early days after the IPO, all within just over a month, driven by a three-pronged battle centered on earnings data, the lock-up expiration surge, and valuation bubbles.
The core logic behind the aggressive positioning of short sellers is simple and brutal. They are wagering on the epic supply shock coming next week. SpaceX is scheduled to release its first quarterly earnings as a public company after the market close on August 4. Just two days later, on August 6, as many as 911.5 million shares will become eligible for release from lock-up restrictions and may enter the public market. This scale means that SpaceX currently has only about 640 million shares available for trading, representing roughly 5 percent of total outstanding shares, and the first unlock will more than double the tradable share ratio to approximately 12 percent. But this is only the beginning. The offering documents indicate that total tradable shares could increase from the current 639 million to 5.33 billion by year-end, an increase of more than sevenfold.
Morgan Stanley warned in its latest report that SpaceX is about to enter its most dangerous moment, with approximately 100 billion US dollars in market value potentially flowing into the market over the coming weeks. The firm estimates that SpaceX will post second-quarter revenue of about 6.75 billion US dollars and an adjusted loss per share of 0.35 US dollars, while Starlink’s global consumer subscriber base is expected to reach 12 million households. Morgan Stanley pointed out that what truly drives market sentiment may not be the financial numbers themselves, but rather management’s commentary on future directions for AI, Starlink, and Starship. Since the Cursor acquisition is expected to close later in the quarter, the Q2 earnings report will not disclose the specific financial contribution of that transaction.
With short sellers amassing in force, SpaceX’s stock price has remained under sustained pressure. On Friday, July 31, the stock closed down 3.4 percent at 108.37 US dollars, representing a decline of approximately 20 percent from the IPO price of 135 US dollars on June 12, and a plunge of more than 52 percent from its all-time high. The Bloomberg Billionaires Index shows that Musk’s latest net worth has fallen to approximately 684 billion US dollars. Just over a month earlier, on June 16, his wealth had reached a peak of about 1.33 trillion US dollars, meaning that in a mere six weeks, more than 600 billion US dollars in wealth had evaporated. This loss alone exceeds the total net worth of any individual on the Bloomberg Global 500 Wealth List other than Musk himself. The direct cause is the simultaneous collapse of his two core assets. SpaceX’s stock has plummeted 46 percent since June 16, while Tesla has also fallen 17 percent since releasing its Q2 earnings report. Musk holds approximately 129 billion US dollars in Tesla stock and over 550 billion US dollars in SpaceX stock, and fluctuations in the value of these two positions are directly determining the wealth landscape of the world’s richest person.
