SpaceX Short Sellers Gain $15.5 Billion as Shares Keep Falling

Short sellers betting against SpaceX have earned an estimated $15.5 billion in paper profits since the company's mid-June initial public offering (IPO), according to data from analytics firm Ortex Technologies through Tuesday. The gains come after the company's stock dropped below its IPO price of $135, reflecting continued weakness in the share price.

The decline has attracted more bearish investors, with short sellers increasing their positions rather than reducing them despite the significant profits already recorded.

Stock Falls Below IPO Price After Early Rally

SpaceX shares initially climbed after the IPO, reaching a post-listing high of $225.64. However, the stock has since reversed course and continued to lose value.

On Wednesday, the shares touched a new low of $115.26, extending losses and moving further below the IPO price.

Short selling is a trading strategy in which investors borrow shares, sell them at the current market price, and later buy them back at a lower price. If the share price falls, the difference becomes their profit.

Short Sellers Increase Bearish Positions

According to Ortex Technologies, there is no indication that investors betting against SpaceX are closing their positions to lock in profits.

"There is no sign of short sellers taking profits on SpaceX," said Peter Hillerberg, co-founder of Ortex.

"If anything they are leaning in harder," Hillerberg added.

Data from Ortex showed that about 360 million SpaceX shares, representing approximately 56% of the company's free float, were out on loan through Tuesday. Shares borrowed for lending are commonly used by investors taking short positions.

SpaceX did not immediately respond to a request for comment.

Elon Musk Warns Against Betting Against SpaceX

SpaceX CEO Elon Musk addressed the growing short interest in a post on X last Friday.

"The survival probability of firms who maintain a significant short position in SpaceX over time is very low," Musk wrote.

His statement comes as the company continues to face heavy betting from investors expecting further declines in the stock price.

Valuation and AI Spending Remain Key Investor Concerns

SpaceX's high market valuation has made it a major target for short sellers who believe the company's share price remains expensive.

At the same time, the company continues to attract strong interest from both retail and institutional investors. Elon Musk's history of publicly challenging short sellers also makes bearish positions in the company particularly risky.

The recent weakness in SpaceX shares also reflects investor concerns about debt-funded spending on artificial intelligence (AI).

Those concerns were reinforced after Tesla, another company led by Elon Musk, reported negative free cash flow in the second quarter for the first time in more than two years. Tesla said the decline came as it accelerated investment in AI infrastructure, battery capacity, robotaxis, and next-generation manufacturing.