SpaceX shares have remained under pressure after short interest jumped to 13% of the publicly tradable float while the stock lost more than 25% over the past five trading sessions.
Summary
- Short interest in SpaceX has climbed to 13% of the public float as SPCX extends its post-IPO decline.
- Rising bearish bets have fueled debate over a potential short squeeze due to the stock’s limited tradable share supply.
- Susquehanna initiated coverage with a neutral rating, citing valuation concerns despite strong long-term growth drivers.
According to data from Ortex Technologies cited by Reuters, bearish bets against SpaceX have risen rapidly in recent days, pushing short interest from 8% in the previous session to 13% of the company’s public float. The increase comes as SPCX trades roughly 30% below its post-IPO high following a sharp rally after its market debut.
Reuters reported that Ortex co-founder Peter Hillerberg described the pace of short-selling activity as unusual for a company that has been public for only a few weeks.
Hillerberg attributed the move to a growing number of traders positioning for additional downside after the stock’s recent decline.
The selling pressure has coincided with profit-taking in newly listed stocks and a broader retreat across risk assets. Market participants who benefited from SpaceX’s early gains are now reassessing the company’s valuation after the stock’s rapid rise and subsequent pullback.
Limited float keeps short-squeeze risk alive
Despite the increase in bearish positioning, some market observers point to conditions that could make short positions vulnerable if buying demand returns.
Current market data shows approximately 83 million SpaceX shares have been sold short, while average daily trading volume stands near 270 million shares. Under those conditions, a sharp rally could force short sellers to repurchase stock to close positions, potentially accelerating gains through a short squeeze.
At the same time, concerns about future share supply have added another layer to the debate. Economist Peter Schiff argued that SpaceX’s strong first-day performance was partly supported by its relatively small public float. In recent comments, Schiff warned that the number of tradable shares could expand significantly over time.
According to Schiff, the public float may increase from roughly 640 million shares to 7.5 billion shares by Dec. 8, representing an almost twelvefold increase. He argued that a substantial rise in available shares could create additional selling pressure if demand fails to keep pace.
Analysts remain divided on valuation
Recent analyst coverage has highlighted the split between bullish long-term expectations and concerns about current pricing.
As crypto.news previously reported, Susquehanna initiated coverage of SpaceX with a neutral rating and a $170 price target. In a research note, the brokerage stated that the company’s valuation depends on aggressive growth assumptions and premium valuation multiples.
While Susquehanna said it would prefer to wait for a more attractive entry point before taking a more constructive stance, the firm also identified several factors supporting the company’s long-term outlook. Those factors include SpaceX’s dominant position in rocket launches, the growth potential of Starlink, early investments in artificial intelligence infrastructure, and the leadership of CEO Elon Musk.
Even with those strengths, Susquehanna cautioned that a significant portion of the expected growth may already be reflected in the current valuation.
Meanwhile, SPCX fell another 1% during the latest session to $154.54, extending its five-day loss to approximately 26%. Despite the recent decline, the company still carries a market capitalization of about $2.03 trillion.
Separately, the company has attracted investor attention after announcing plans to raise $20 billion through a bond offering, a move that adds another closely watched catalyst as traders debate whether the recent selloff has gone too far or not far enough.
