Short-seller investors have recorded an estimated evaluation profit of approximately $15.5 billion following a sharp decline in SpaceX shares after its initial public offering [1].
The scale of these gains highlights a significant market bet against the company's valuation and the volatility accompanying its transition to a public entity.
Data from Otex Technologies indicates that short sellers are currently holding an evaluation profit of about $15.5 billion, which is approximately 22.8 trillion to 23 trillion won [1, 2]. This profit comes as the stock experienced a dramatic intraday swing on June 16, 2024, when shares peaked at $225.64 before closing at $118.25 [1].
The company's IPO price was set at $135 [1]. Since that offering, the market has seen aggressive shorting activity, with approximately 56% of floating shares, or about 360 million shares, being shorted [1].
Elon Musk responded to the market activity with a warning on X. He said that companies maintaining large short positions in SpaceX for a long period have very low survival odds [1].
Despite the warning from the CEO, data suggests that investors are not retreating. Peter Hillerberg, co-founder of Otex Technologies, said there are no signs that short sellers intend to realize their profits. He said that they are instead pushing their bets even further [1].
The current data was reported on July 23, 2024, marking a period of roughly six weeks of trading following the IPO [1].
“Short-seller investors have recorded an estimated evaluation profit of approximately $15.5 billion.”
The massive scale of short interest suggests a profound divide between Elon Musk's internal valuation of SpaceX and the market's appetite for the stock post-IPO. By maintaining positions despite Musk's public warnings, short sellers are signaling a belief that the stock's peak was an unsustainable bubble rather than a temporary dip, potentially placing immense pressure on the company's share price stability.
