SpaceX breaks through, short sellers’ unrealized profits have reached nearly 4 billion dollars.

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SpaceX's stock price has fallen below its IPO price, and short sellers are reaping substantial paper profits from this decline.

According to the latest data from S3 Partners, SpaceX shorts’ mark-to-market profits have risen to $3.88 billion. The stock hovers around its IPO price of $135 and has fallen for the fourth consecutive trading day, hitting an intraday low of $132.15. Meanwhile, around 181 million shares—about 28% of the publicly traded shares—have been sold short, a historically high level for a newly listed company in its first month.

Market pessimism continues to ramp up. Over the past week, about 37 million new shares have been sold short, with a market value of about $5 billion. Investors are closely watching two major upcoming catalysts: the 13th Starship test flight, which could take place as soon as this Thursday, and the company’s first quarterly earnings report—which will trigger the lifting of lockups for some shareholders, potentially releasing a large number of shares into the market.

Stock Slump Wipes Out Over $860 Billion in Market Value

Since the closing high on June 16, SpaceX’s share price has fallen by about one-third, with market capitalization shrinking by $860 billion. This drop marks a rapid fading of SpaceX’s high valuation aura in its early days as a public company.

Ihor Dusaniwsky from S3 Partners said, "The recent weakness in the share price has both stimulated short selling and reflects the market’s early positioning for the upcoming end of the lockup period."

Dual Headwinds: Lockup Expiry and First Earnings Report

The rapid expansion in short positions closely coincides with the timing of the company’s first quarterly earnings report. After the report, some early shareholders will be able to sell their shares for the first time, opening a window in the coming weeks when large numbers of shares will be unlocked and potentially hit the market.

This potential supply-side pressure is making the market more cautious about the stock's trajectory. The current 28% short interest is a rare high for a newly listed company in its first month, indicating that institutional investors have a fairly unified view of short-term downward pressure on the stock.

Aside from fundamental pressures, SpaceX’s 13th Starship rocket test flight may take place as early as this Thursday, and the market sees this as a key short-term catalyst for the stock's performance. The test results could significantly affect investor confidence in the company’s technological progress and directly influence position adjustments by both bulls and bears.

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