Space Exploration Technologies Corp conducted the largest initial public offering in history during June, debuting at $135 per share and briefly achieving a valuation of $2.1 trillion. In the five weeks following the listing, the company became the most heavily shorted newly listed stock tracked by Wall Street, according to data from S3 Partners.
Short interest in the company expanded significantly during this period, growing from approximately 40 million shares representing 5-7% of the tradable float to over 206 million shares constituting around 32% of the float. This increased bearish positioning translates to roughly $25 billion in notional short bets against the company. The primary catalyst for this surge in short-selling activity stems from SpaceX’s staggered lockup expiration schedule rather than fundamental sentiment considerations. The company released fewer than 5% of total shares during the IPO and implemented a staged unlocking plan featuring approximately 7% tranches at designated intervals following the listing.
The initial major unlock event is scheduled to occur two trading days after the company’s first earnings report, releasing 911.5 million shares unconditionally. A second tranche totaling 455.8 million shares remains contingent on the stock trading at or above $175.50 on five of ten trading days preceding results. Given that shares traded at $123.54 as of July 21, representing a 40% decline from an intraday peak of $225.64 on June 16, the conditional threshold appears unlikely to be met, suggesting the unconditional tranche will be released instead. S3 Partners analysts identified the recent share-price decline and anticipated lockup expirations as primary drivers of increased short-selling activity.
Company leadership directly addressed the short-selling phenomenon, with assertions made regarding the long-term survival prospects of firms maintaining significant short positions. SpaceX confirmed on July 21 that it will release its inaugural quarterly earnings report as a public company following the close of regular trading hours on August 4. This report will represent the first detailed disclosure of the company’s financial performance since the IPO and will likely serve as a significant test for both bullish and bearish market participants. The earnings release will trigger the first of several planned lockup expirations, allowing shareholders to sell qualifying shares from the restricted pool.
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