SpaceX Bulls, Bears… Mark Your Calendar
Musk says the shorts won’t survive. The shorts have never been bigger…
Last week, Elon Musk warned that firms maintaining large short positions in SpaceX faced a “very low” survival probability. Wall Street’s response? Short sellers added roughly 21 million more shares to their bearish bets. Today, nearly one-third of SpaceX’s tradable float is sold short.
Now the calendar gets involved.
SpaceX reports earnings on August 4. The first lockup expires 48 hours later, potentially releasing $116 billion worth of shares into the market—more market value than currently exists in the company’s entire public float.
The debate around SpaceX is about to meet its biggest test yet.
Here’s what happened. ⇩
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The shorts exploded…
✱ A fivefold increase in just one month suggests this wasn’t a reaction—it was preparation.
Bears have been steadily adding to their positions ahead of earnings and the lockup, betting those two events could reshape the stock’s next move.
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How far has it actually fallen?
SpaceX almost got cut in half.
→ The drawdown, measured two honest ways:
✱ The exact percentage depends on where you start the stopwatch. Some measure the drop from SpaceX’s intraday peak, others from its highest close. Either way, the conclusion barely changes: the stock has erased nearly half of its post-IPO value.
Tuesday offered a brief reprieve. Shares climbed about 3% to $123.54, snapping a seven-session losing streak, but they remain below the $135 IPO price set just over a month ago.
The decline has reshuffled more than the chart. During the slide, Meta overtook SpaceX in market value—roughly $1.64 trillion versus $1.59 trillion—while Elon Musk’s net worth has fallen from more than $1 trillion on IPO day to about $786 billion, according to Forbes.
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What Happens After Earnings↓
SpaceX’s current tradable float is only around 640 million shares — roughly 5% of the more than 13 billion shares outstanding.
On August 6, the second trading day after earnings, approximately 911.5 million shares — worth about $116 billion at current prices — become eligible for sale.
That single unlock is worth more than the entire float trading today.
A further 455.8 million shares could unlock if the stock trades above $175.50 for 5 of 10 days around the earnings date — a bar that currently looks well out of reach given the stock trades around $123.
✱ SpaceX intentionally built a staggered release schedule rather than using the standard 180-day IPO lockup, allowing the float to grow in stages instead of all at once. Musk’s shares—and those of a handful of other insiders—remain locked until 2027.
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Is This Actually A Trap For Short Sellers?
What favors a squeeze?
→ 32% of the float is sold short—an unusually crowded trade that could unwind quickly.
→ A stronger-than-expected earnings report on August 4 could force bears to buy shares back.
→ Macquarie still calls the recent selloff a “buying opportunity” and maintains its Outperform rating.
→ BofA’s Ronald Epstein expects losses to improve to -$0.16 per share, versus -$0.34 a year ago.
What works against a squeeze?
→ Two days after earnings, the tradable float is set to expand dramatically.
→ More shares available means more shares to borrow, easing one of the key pressures that fuels a classic short squeeze.
→In other words, the stock could surprise—but the market structure becomes less favorable for trapping shorts.
The shorts may have one problem. They also have one advantage.
The problem: nearly one-third of SpaceX’s float is sold short. A strong earnings report could force a rush for the exits.
The advantage: the lockup that follows would add hundreds of millions of shares to the tradable float, making stock easier to borrow and reducing one of the classic ingredients for a prolonged squeeze.
The irony is that the same week that could pressure shorts also makes the stock easier to short.
Meanwhile, the rocket keeps getting delayed.
→ Separately, a Falcon 9 mission carrying 24 Starlink satellites was also scrubbed. None of the delays suggest a major technical failure, but they’re arriving at an awkward moment—just as investors prepare for SpaceX’s first earnings report and debate whether the recent selloff has gone too far.
Wall Street Isn’t Giving Up On SpaceX.
Despite the stock’s sharp decline, analysts haven’t followed it lower.
→ The median price target remains $226—about 77% above Tuesday’s close.
Bank of America’s Ronald Epstein is looking beyond the upcoming earnings report, pointing to orbital computing—processing data in space—as one of the company’s next long-term growth opportunities.
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