Short interest in SpaceX jumps as shares hover near IPO price

Short sellers are taking a much bigger swing at SpaceX while the stock trades close to where it went public. For everyday investors, the move adds another pressure point to a newly public name that already has a thin tradable share base and several upcoming share unlocks.

About 185 million SpaceX shares have been sold short, equal to roughly 29% of the company’s public float, according to S3 Partners. S3 put the value of those bearish positions at about $25 billion.

That is a sharp increase from three weeks earlier, when S3 estimated short interest at about 40 million shares, or roughly 5% to 7% of the float. Matthew Unterman, head of research at S3, told CNBC that short sellers have continued to build speculative positions since the IPO.

A short sale is a bet that a stock will fall. The trader borrows shares, sells them, and hopes to buy them back later at a lower price. If the stock rises instead, short sellers can face losses and may need to buy shares to close the trade, which can add to volatility.

Shares are back near the IPO level

SpaceX’s stock has struggled after a strong start as a public company. CNBC reported that shares have dropped about 20% in July and briefly traded below the $135 IPO price on Wednesday for the first time. The stock was recently around $136, according to CNBC.

The short interest is building while the amount of stock available to trade remains limited. KeyBanc Capital Markets said SpaceX’s initial public float represented only about 5% of its roughly 13 billion shares outstanding. Public float means the shares available for regular market trading, excluding stock that is restricted or closely held.

That small float matters because it can make price moves sharper. When fewer shares are available, large buying or selling demand can have a bigger effect on the stock price than it would for a company with a larger float.

Lockups are the next big watch item

Investors are also watching SpaceX’s lockup schedule. A lockup is a restriction that prevents insiders and some early investors from selling shares for a set period after an initial public offering.

KeyBanc estimated that the first major unlock could arrive around SpaceX’s second-quarter earnings report, when about 11% of shares outstanding may become eligible for sale. The firm said additional blocks of roughly 4% each are expected to become available starting around day 70 after the IPO, with more unlocks tied to performance milestones and third-quarter earnings.

The largest restricted position belongs to Elon Musk. KeyBanc said Musk’s stake represents about 42% of shares outstanding and remains locked up until June 2027.

SpaceX also has a company event on the calendar. Its 13th Starship test flight is scheduled for Thursday, according to SpaceX. CNBC described the launch as a possible catalyst for investor sentiment toward the shares.

For now, the stock is sitting near its IPO price while bearish positioning rises and more shares could become tradable in stages. That combination gives investors more to track than the daily quote alone.

This story draws on original reporting from CNBC.