SpaceX's stock has become the most shorted newly listed stock, with 28% of float in short interest. This reflects investor skepticism regarding its high valuation, particularly after recent declines below its IPO price.
SpaceX, following its record-setting IPO, has quickly attracted short sellers, becoming Wall Street's most shorted new stock. As of now, short interest has surged to 181 million shares, which is 28% of its tradable float. The company's current valuation, trading at roughly 49 times its expected revenue, has fueled skepticism among investors.
After debuting on the Nasdaq, SpaceX's stock fell below its initial $135 IPO price for the first time, closing at $135.27. This decline represents about a 10% drop over the past five trading sessions, contributing to growing investor concerns about the sustainability of its current valuation.
The high level of short interest in SpaceX is unprecedented for a newly listed company, according to S3 Partners. Unrealized gains for short sellers are estimated at $3.88 billion, indicating significant bearish sentiment. Analysts remain largely bullish, but the impending lockup expiry could introduce additional volatility into the stock.
There are key risks associated with this high short interest. A successful Starship test flight or positive earnings guidance from SpaceX could catalyze a rapid re-rating of the stock, forcing short sellers to quickly cover their positions. Moreover, fluctuations in interest rates and potential earnings acceleration from AI investments could impact the broader tech market, including SpaceX.
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SpaceX's stock has become the most shorted newly listed stock, with 28% of float in short interest. This reflects investor skepticism regarding its high valuation, particularly after recent declines below its IPO price.