SpaceX’s Stock Has Tumbled Below Its IPO Price. Short Sellers Betting Against It Are Up Billions

Investors betting against SpaceX have amassed an estimated $15.5 billion in paper profits just weeks after the company's blockbuster initial public offering, as the stock continues to slide below its debut price amid mounting concerns over valuation and heavy spending on artificial intelligence.

According to data from analytics firm Ortex Technologies cited by Reuters, short sellers have continued to increase their bearish wagers even after the stock's steep decline. Shares of the Elon Musk-led company, which operates across the space and AI sectors, have fallen below their $135 IPO price after briefly soaring to a post-IPO high of $225.64.

The selloff touched a fresh low on Wednesday, when SpaceX shares touched $115.26, before recovering some losses on Thursday.

Short selling involves borrowing shares, selling them at the current market price and then repurchasing them later at a lower price, allowing investors to pocket the difference if the stock declines.

"There is no sign of short sellers taking profits on SpaceX," Ortex co-founder Peter Hillerberg told Reuters. "If anything they are leaning in harder," he added. Ortex estimates that roughly 360 million SpaceX shares, representing about 56% of the company's free float, were out on loan for short selling through Tuesday. SpaceX did not immediately respond to Reuters' request for comment.

Musk, however, has publicly dismissed the growing wave of bearish bets. In a post on X last week, the billionaire CEO warned investors against maintaining large short positions in the company. "The survival probability of firms who maintain a significant short position in SpaceX over time is very low," Musk wrote.

Despite the recent slump, betting against Musk-led companies has historically been risky. Tesla, in particular, inflicted billions of dollars in losses on short sellers during its dramatic rally over the past decade, earning Musk a reputation for publicly challenging investors wagering against his companies.

Still, analysts say SpaceX's lofty valuation has made it an attractive target for skeptics who question whether the company's long-term growth prospects justify its market capitalization. The latest decline also reflects broader investor concerns surrounding the enormous costs associated with the artificial intelligence boom. Those worries intensified after Tesla reported negative free cash flow in the second quarter for the first time in more than two years.

The electric vehicle maker attributed the decline to accelerated investments in AI infrastructure, battery production, robotaxi development and next-generation manufacturing, reinforcing fears that Musk's companies may face increasing financial pressure as they pursue ambitious expansion plans.

While some investors remain optimistic about SpaceX's long-term prospects, the stock's sharp volatility since its IPO has created a challenging environment for both bullish and bearish traders.

Retail investors and large institutional funds initially poured into the offering, helping propel shares sharply higher in the first days of trading. However, persistent selling pressure has reversed those gains, with the stock now trading below its initial offering price.

For short sellers, the decline has translated into substantial unrealized gains. Whether those profits become permanent will depend on how the stock performs in the coming months as investors continue to assess the company's valuation, AI spending strategy, and broader market conditions.