Key facts
- Short interest in SpaceX has increased to 13% of total shares available for public trading.
- SpaceX's stock has dropped approximately 30% from its peak of $225.64.
- The cost to borrow shares for shorting is currently around 1%.
- Utilization of available stock for lending has risen to 39%.
Short sellers have intensified their bets against Elon Musk's SpaceX following a significant drop in its share price after its market debut. Data from Ortex Technologies indicates that SpaceX's short interest has climbed to 13% of its total shares available for trading, up from 8% previously. This surge in short selling is attributed to the stock's approximately 30% decline from its post-debut high of $225.64, making the company's substantial $2 trillion valuation a target for traders anticipating further price decreases.
Despite the increased shorting activity, the cost to borrow shares for shorting remains relatively low at about 1%, a significant decrease from the 14% seen when trading began. Utilization, which measures the proportion of available stock being lent out, has increased to 39% from the mid-30s, suggesting ample supply remains available. This contrasts sharply with the "Magnificent Seven" tech stocks, which exhibit much lower short interest and borrowing costs.
Analysts note that while short sellers are positioning for a decline, the limited float size of SpaceX's stock makes them vulnerable to a short squeeze. A rapid increase in buying pressure, potentially triggered by any positive catalyst, could significantly accelerate any upward price movement, a dynamic characteristic of a short squeeze. The company's high valuation, coupled with strong retail and institutional interest, presents a risky environment for short sellers.