Elon Musk Said Short Sellers Of SpaceX Likely Won’t Make It. They Are Increasing Anyway

Elon Musk said that investors short-selling SpaceX had an extremely slim chance of making it. Their numbers are increasing anyway.

According to CNBC, 32% of the company's publicly tradeable stocks are in the hands of short sellers at the moment. They represent about $25 billion in notional bearish bets, the outlet added, citing estimates from S3 partners. It marks a sizable increase from the 5% yo 7% a month ago.

"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," Matthew Unterman, head of research at S3, told the outlet.

Musk has rejected the stances, recently saying in a social media post that he said "SpaceX will be worth more than Earth if we achieve our goals."

The company's shares have been falling over the past sessions, dropping below its IPO price of $135. They were bouncing back on Tuesday, soaring more than 6% at 10:52 a.m.

However, the current scenario stands in contrast with that of June 16, when SpaceX shares closed at $201.80, capping a blistering rally fueled by optimism surrounding the company's leadership in commercial space launches, satellite communications, and emerging artificial intelligence initiatives.

The drop comes even after the company entered the Nasdaq 100, unleashing a new wave of passing investors buying the stock as funds tracking the index matched its composition.

Those passive funds were required to purchase SpaceX shares as part of the benchmark's rebalancing, a move that typically creates additional buying pressure. Yet the anticipated demand was not enough to offset broader selling, suggesting many investors had already positioned themselves ahead of the inclusion.

However, major investment banks initiated research coverage last week with bullish ratings. Morgan Stanley assigned the stock an "overweight" rating and a $300 price target, while Bernstein began coverage with an "outperform" rating and a $239 target. RBC Capital Markets also rated the shares "outperform," setting a $225 target, while UBS launched coverage with a "buy" recommendation and a $210 12-month price objective.

Analysts view SpaceX as the clear leader in reusable launch technology, a competitive advantage that has helped it dominate the commercial launch market while lowering costs. At the same time, its Starlink satellite internet network continues to expand globally.

Elsewhere, research firm MoffettNathanson initiated coverage with a neutral rating, arguing that much of SpaceX's future growth already appears reflected in the share price. CFRA took an even more cautious stance, recommending investors sell the stock amid concerns that expectations have become overly optimistic following the company's blockbuster market debut.