The percentage of short positions in SpaceX fell from 34% to 11% of shares outstanding
The share of short positions in SpaceX stock fell on Wednesday to approximately 11% of the company’s free-floating shares—down from a peak of 34% last week. CNBC reported this, citing data from S3 Partners.
The decline is attributed both to investors closing out some of their short positions and to a significant increase in the number of shares available for trading following the end of the first major lock-up period. Igor Dusanovsky, Managing Director of Predictive Analytics at S3 Partners, stated that investors who wanted to bet on a decline in the stock price have already largely exhausted the opportunities for such trades.
As investors exited their short positions, SpaceX shares rebounded sharply following a decline that occurred after the company released its first earnings report. On Wednesday, the stock rose 8%—to approximately $144 per share. This is about 7% above the IPO price of $135 and 38% higher than the low reached on August 3.
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Following SpaceX’s first earnings report, the stock price fell as the company reported that its capital expenditures were more than double its revenue. The drop in share prices attracted short sellers, who borrow shares and sell them, hoping to buy them back later at a lower price.
Last Thursday, more than 911 million SpaceX shares became available for trading following the end of the initial lock-up period. This block represented about 7% of the company’s total shares and exceeded the 639 million shares sold during the IPO. According to the prospectus, another 319 million shares may be unlocked on August 20, and approximately 700 million each in September and October. An increase in the number of shares in free float could heighten volatility, while also making it easier to open new short positions should negative investor sentiment return.
