HOUSTON — Elon Musk went to X on Wednesday to deliver a message to the traders betting his rocket company would keep falling. Their survival probability, he wrote, was very low.
The post came as SpaceX shares hovered more than 5 percent below the $125 IPO price set last month, a slide that has handed an estimated $8.7 billion in mark-to-market gains to the short sellers who assembled positions during the offering, per Reuters. With roughly 32 percent of SpaceX’s float now sold short, one of the highest concentrations of bearish institutional conviction attached to a newly public company in recent years, the stage is set for a confrontation Musk has won before.
SpaceX priced on June 12 at $125 per share, raising roughly $6 billion in one of the most closely watched technology offerings of the year. The price was set at the top of its initial range, reflecting strong institutional demand from hedge funds and sovereign wealth funds that positioned the company as a rare pure-play space-infrastructure investment. Shares climbed to $136 in their first week before a sustained retreat began. The stock briefly touched $112 in mid-July before bouncing; it closed Tuesday at $118.40, snapping a seven-day losing streak. The company disclosed Tuesday that it has scheduled a quarterly earnings call for August 12, the first time it will open its financials to public scrutiny since going public.
The short interest tells a specific story. By July 16, short sellers had collectively notched nearly $8.7 billion in unrealized gains assembled almost entirely in six weeks. S3 Partners, an analytics firm that tracks short positions, placed the total closer to $5 billion as of last Friday. The divergence reflects different methodologies, but the underlying dynamic is the same: the trades are in the money, and the bears are not yet inclined to leave.
SpaceX’s addition to the Nasdaq-100 index in early July generated brief structural buying pressure from passive funds that mirror the index, but that technical catalyst proved insufficient to reverse the broader slide. The stock has remained below the IPO price despite the mechanical demand that index inclusion implies.
Musk’s precise language on X described short sellers as facing a “very low” survival probability, an echo of similar warnings he issued against Tesla bears during the company’s volatile 2019 and 2020 period. Those warnings preceded one of the more dramatic short squeezes in modern market history: Tesla shares rose more than 700 percent over the following 18 months, forcing billions in losses onto traders who had bet against them. Whether SpaceX’s fundamentals will generate a comparable reversal remains entirely unresolved; the company’s August 12 earnings call will supply the first independent data point.
The decline in SpaceX shares accelerated in mid-July following reports of increased competitive pressure from Chinese satellite broadband providers in markets where Starlink holds commanding but not uncontested share. The connection between that competitive pressure and the stock’s retreat has been noted by analysts without producing consensus on any single cause.
Morgan Stanley, which led the SpaceX IPO syndicate, disclosed to clients Wednesday that it had earned approximately $100 million in fees from the offering, according to Bloomberg. That figure was described by analysts as a starting point for a longer advisory relationship with the company. Investment banks with nine-figure paydays from an IPO tend not to remain passive observers if the stock collapses.
SpaceX carries a market capitalization of approximately $228 billion at current prices, compared to the $241 billion implied by the $125 IPO price. That roughly $13 billion gap in implied value since the debut represents the contested ground between Musk and the institutional bears who have, for six weeks, consistently had the better of the trade.
The August 12 earnings call will be the first time investors can measure the company’s actual financial performance against the public market’s skepticism. SpaceX does not disaggregate revenue in its filings, meaning analysts have been working from partial information: Starlink subscriber estimates, disclosed launch contracts, and early Starship commercial agreements. The granular income statement data that conventional public companies provide has not been available to price the stock against anything except momentum and expectation.
Short sellers have had the numbers on their side so far. The stock is below the IPO price. The float is 32 percent short. The earnings call is three weeks away. None of those facts changed since Musk posted his warning Wednesday morning, and none of them will until August tells a different story.
