Elon Musk took to X to respond to mounting bearish wagers on SpaceX (NASDAQ: SPCX), offering a blunt note to investors who have amplified their short positions since the company’s June initial public offering.
"I try to warn them, but they just double down …" - Elon Musk
The comment landed as market participants prepared for SpaceX’s first quarterly earnings report as a public company, scheduled for release after the close on August 4. Trading desks and portfolio managers are anticipating elevated swings in SPCX shares around the print.
Data published by S3 Partners underpin the concern. Short interest stands at roughly 34% of the public float, a level the report characterizes as an extreme concentration of bearish bets - noting that values above 10% are generally considered high. Compounding the exposure, S3 reports that 95% of the available supply is currently on loan, effectively exhausting the pool of borrowable shares.
With utilization at that level, borrowing costs have surged, making it expensive for those holding short positions to maintain them. Taken together, the metrics present a classical technical setup for a short squeeze: should the earnings release contain unexpectedly positive elements, shorts could be forced into rapid buybacks, magnifying any upward move in the share price.
Market participants debating the merits of the bearish case point to several company-specific dynamics that have encouraged the accumulation of negative bets. First, despite reported strong revenue - estimated at about $19 billion over the trailing 12 months - skeptics contend that SpaceX’s implied enterprise valuation, cited at roughly $1.6 trillion, allows limited margin for operational or executionary missteps.
Second, the company continues to invest heavily in Starship development and its launch infrastructure. These capital-intensive projects are cited as potential pressure points for near-term profitability, according to analysts discussing the short thesis.
Third, lock-up provisions that have constrained insider share sales since the IPO are expected to begin expiring shortly after tonight’s earnings announcement. That change could increase the available supply of shares and is raised by bears as an additional risk to current holders.
All told, the market finds itself divided. On one side are concentrated short positions that already control 95% of the borrowable float and face steep carrying costs. On the other side is the company’s founder and chief executive, whose public rebuttal to short sellers underscores the tension between the two camps.
When SpaceX’s results are published, the balance of risk could shift rapidly. If the report contains elements that the market interprets as positive, the scramble by short sellers to cover could intensify price moves. Conversely, a disappointing set of numbers could validate the concentrated short interest and weigh on the shares. Either outcome is likely to produce notable trading volatility.
Investors and traders will be watching not only headline revenue and profitability figures but also commentary around capital spending on Starship and any indications on the timing of lock-up expirations. Those factors are central to the arguments both for and against the crowded short trade.
Bottom line: With a highly concentrated short position, limited borrowable supply, and elevated borrowing costs, SpaceX’s first earnings as a public company creates a scenario where market moves could be amplified. The company’s post-close report on August 4 will be the immediate catalyst for whichever side of the trade proves decisive.