SpaceX Short Interest Surges to $24.6 Billion Ahead of Earnings, Lock-Up Expiration

Short sellers are significantly increasing their bearish wagers against SpaceX, with total short interest climbing to $24.6 billion ahead of two pivotal events for the recently public company: its first-ever quarterly earnings report and the expiration of a major share lock-up.

A Spike in Bearish Positions

Data from S3 Partners shows that as of July 29, short interest in SpaceX reached 219.3 million shares. This figure represents approximately 34% of the company's publicly available shares, a sharp increase from the 23.3 million shares reported on June 16, according to the financial analytics firm.

The total value of these short positions now exceeds the bearish bets placed against Tesla Inc. (TSLA), the other major public company led by CEO Elon Musk. This indicates a significant concentration of negative sentiment from institutional investors focused on near-term catalysts.

Twin Catalysts Driving the Bets

Investors are positioning themselves for potential volatility surrounding two key dates. First, SpaceX is scheduled to release its inaugural quarterly results as a public company on August 4. Just two days later, on August 6, a post-IPO lock-up period expires, which could allow up to 911.5 million shares to become available for trading.

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"The big bet right now is on the unlock and effectively that there won't be anything announced on earnings that will overcome the volume of unlocked shares coming to market," said Sam Pierson, director of research at S3 Partners. The potential flood of new supply is seen by short sellers as a significant headwind for the stock price.

Impact on Share Supply

The lock-up expiration stands to dramatically alter SpaceX's trading dynamics. Currently, the company has a public float of about 640 million shares, or roughly 5% of its total shares outstanding. According to S3 Partners, the release of newly eligible shares will more than double that proportion to approximately 12%.

This heightened demand to short the stock has also increased the cost for traders to borrow shares. "There is a little friction for shorts who want to keep the position on through next week, after that it is very likely the borrow cost will go back to being easy to borrow," Pierson noted, suggesting the elevated borrowing costs are likely temporary and tied directly to next week's events.