Bearish bets against SpaceX have surged to roughly 32% of the company's tradable shares, and Elon Musk says the investors behind those bets are unlikely to survive the wager.
About 206 million SpaceX shares are now sold short, representing approximately $25 billion in notional value, according to estimates from S3 Partners, a financial analytics firm that tracks short-selling activity. That figure has ballooned from roughly 40 million shares, between 5% and 7% of the float, just one month ago. As recently as last week, the number stood at around 185 million shares, or 29% of the float. The acceleration is striking: short interest nearly doubled in a matter of days.
Musk responded Tuesday with a post on X, the social media platform he owns, making his position plain. CNBC reported on the exchange and the underlying data.
"The survival probability of firms who maintain a significant short position in SpaceX over time is very low. I said SpaceX will be worth more than Earth if we achieve our goals. Obviously true."
That is not a hedge. Musk has a long history of clashing with short sellers, most famously during Tesla's years-long battle with bearish investors, and his language here carries the same confidence. Whether the market rewards that confidence or punishes it will depend on what SpaceX shows investors when it releases its first quarterly earnings report as a public company after markets close on August 4.
The speed of the buildup deserves attention. One month ago, short sellers held roughly 40 million shares. Last week, that number had climbed past 185 million. By Tuesday, it reached 206 million, a fivefold increase in about four weeks.
Matthew Unterman, head of research at S3 Partners, told CNBC that the surge is tied to specific near-term events on SpaceX's calendar:
"We continue to see short sellers adding exposure ahead of several key upcoming catalysts, including the company's first earnings report as a public company and subsequent lock-up expirations."
Lock-up expirations matter because they free early investors and insiders to sell shares for the first time. When a flood of new supply hits the market, prices can drop, and short sellers profit from falling prices. The August 4 earnings report adds a second variable. If SpaceX's numbers disappoint, the shorts win. If the numbers impress, they face a painful squeeze.
SpaceX shares rose about 3% on Tuesday, climbing to roughly $124 and snapping a seven-session losing streak. But the stock remains well below its $135 IPO price, meaning anyone who bought at the offering is still underwater.
Not everyone on Wall Street shares the bears' pessimism. Macquarie, the analyst firm, reiterated an outperform rating on SpaceX on Tuesday and urged investors to buy into the recent weakness. The firm's call amounts to a direct bet against the short sellers, a vote that SpaceX's post-IPO pullback is temporary, not structural.
The divergence between Macquarie's bullish stance and the record short interest sets up a high-stakes standoff heading into August. One side will be proven decisively wrong.
The context for the short-selling surge starts with the IPO itself. SpaceX aimed to raise approximately $75 billion at a target valuation of around $1.8 trillion, pricing shares at roughly $135 on the Nasdaq under the ticker SPCX. If completed at that scale, the offering would surpass Saudi Aramco's $26 billion record as AP News reported, making it the largest IPO in history.
But the company's financials gave skeptics ammunition. SpaceX reported $18.7 billion in revenue last year alongside $4.9 billion in losses, with those losses expected to widen. Its Starlink satellite internet division generated $4.4 billion in operating income, serving 10 million customers across 150 countries through a constellation of roughly 10,000 satellites. The rocket and launch side of the business, however, burned cash at a rate that raised eyebrows.
Morningstar analysts Nicolas Owens and Suryansh Sharma valued SpaceX at approximately $780 billion, roughly half the IPO target, and called the company "significantly overvalued." They suggested investors would find better entry points after the IPO. That assessment looks prescient now, with shares trading at $124, more than 8% below the offering price.
SpaceX's own prospectus struck an unusual tone, warning prospective investors that the company's share structure would "limit or preclude your ability to influence corporate matters and the election of our directors." The filing also included a line that read more like a mission statement than a risk disclosure: "We do not want humans to have the same fate as dinosaurs."
Musk's warning to SpaceX shorts echoes a pattern. Tesla short sellers famously lost billions as the electric vehicle maker's stock climbed relentlessly between 2019 and 2021, defying years of bearish consensus. Musk taunted those investors publicly and repeatedly, and the market ultimately proved him right.
SpaceX, though, presents a different challenge. Tesla was a car company with measurable production numbers, delivery targets, and quarterly revenue growth that eventually silenced doubters. SpaceX is a rocket and satellite company with enormous capital requirements, a $4.9 billion annual loss, and a valuation that even sympathetic analysts struggle to justify at current levels. The short sellers are not betting against Musk's vision. They are betting that the stock price already prices in decades of success that has not happened yet.
The $25 billion in bearish bets is not a casual position. That represents serious institutional conviction. And Unterman's data shows the conviction is growing, not shrinking, short interest jumped from 29% to 32% of the float in roughly a week.
Musk's counter-argument is simple: SpaceX will eventually be worth more than everything on Earth. He stated that claim plainly on X and added two words: "Obviously true." There is no ambiguity in his position, and no hedging.
SpaceX confirmed Tuesday that it will release its first quarterly earnings report as a public company after U.S. markets close on August 4. That report will give investors their first detailed look at how the company is performing since going public, revenue trends, cash burn, Starlink subscriber growth, and launch cadence.
For the bulls, the earnings report is a chance to prove the valuation thesis. For the bears, it is a chance to validate a bet that has already grown to $25 billion. And for the lock-up expirations that follow, the stakes only climb. If insiders start selling into a market already crowded with short sellers, the downward pressure could intensify. If the earnings surprise to the upside, short sellers face a squeeze that could cost them billions.
Wedbush analyst Dan Ives framed the broader significance of the IPO when SpaceX first filed, calling it "the first major test for public markets after years of muted IPO activity." That test is now underway, and the early grades are mixed at best, a stock below its offering price, a founder publicly warning his opponents to get out, and a quarter of the tradable float bet against the company.
Free markets sort these disputes with ruthless clarity. On August 4, SpaceX will show its cards, and someone at this table is going to lose a fortune.