Key facts
- SpaceX's stock has fallen significantly after its $86 billion IPO.
- Short sellers are estimated to be holding approximately $5 billion in paper profits.
- The company's market capitalization has dropped by about $1 trillion from its peak.
- SpaceX shares briefly traded below their $135 IPO offering price.
- Around 30% of SpaceX's total float is estimated to be sold short.
SpaceX short sellers are currently realizing substantial gains, with an estimated $5 billion in paper profits following a sharp decline in the company's stock price after its record-breaking $86 billion IPO last month. Initially, SpaceX's market capitalization surged, briefly surpassing Amazon's valuation. However, the stock has since experienced a significant downturn, losing approximately $1 trillion from its peak. On Wednesday, shares dipped below the $135 IPO offering price for the first time, and continued to fall, opening around $127 on Friday after a planned Starship test was postponed. Financial data provider S3 Partners estimates that 192 million SpaceX shares, representing about 30% of the total float, have been sold short. According to S3, bearish investors have intensified their short positions, increasing the notional value of short interest to $25 billion. Analysts at Ortex noted the extreme volatility for short sellers, who have swung from paper losses to significant profits. Elon Musk's companies, including Tesla, have historically been targets for short sellers, often leading to public clashes with the billionaire.