SpaceX short sellers are running out of bullets as stock rebounds more than 40% off low
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- SpaceX shares rebounded roughly 41% from their Aug. 3 low, climbing to $148 by Wednesday and surpassing the $135 IPO price amid a sharp retreat in short interest.
- Short sellers reduced their positions dramatically as short interest fell to 11% of tradable shares from a peak of 34% last week, according to S3 Partners.
- S3 Partners attributed the decline in short interest to both the expiration of a lockup period, which expanded the float, and active short covering by investors closing bearish bets.
- Ihor Dusaniwsky of S3 Partners stated that many shorts have exhausted their capacity to maintain positions, noting 'Only so much money you can put into a trade.'
- The first major lockup expiration on Thursday unlocked over 911 million shares—exceeding the IPO's 639 million—mechanically reducing short interest and enabling the rally to accelerate.
- Additional share unlocks are scheduled for Aug. 20 (319 million), September (~700 million), and October (~700 million), potentially increasing volatility or allowing new short positions.
Why it matters: The rapid unwinding of short positions removes downward pressure on SpaceX’s stock just as supply expands, shifting market dynamics: bearish investors lose the ability to drive declines while increased float gives long-term investors more room to build stakes. With nearly 1.7 billion more shares set to unlock by October, the balance between employee selling and institutional demand will determine whether this rally sustains or fragments.
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