The world's most valuable IPO, SPCX, is now Wall Street's most shorted new stock
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The world's most valuable IPO, SPCX, is now Wall Street's most shorted new stock<br>Stock market
AI Sentiment: 22/100 Bearish<br>This score is generated through AI-driven analysis of the article's content.
Author<br>Vatsala Gaur Vatsala G.<br>Jul 16, 2026, 08:48 AM
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SPCX short<br>Sell short SpaceX (SPCX). The stock is already trading below IPO price, short interest is extreme (28% of float), and lockup expiry can add supply right when valuation is stretched (~49x expected revenue). The setup is a positioning unwind plus potential insider selling pressure, not a slow fundamental debate. Key risk: SpaceX delivers a major upside catalyst (Starship test flight success + strong guidance/earnings) that forces shorts to cover fast and re-rates the stock higher.<br>Key Risk: A major operational/earnings beat triggers a sharp re-rating and forces short-covering.
AI capex multiple compression<br>Sell high-multiple AI infrastructure beneficiaries that trade like “AI growth at any price,” and rotate into cheaper cash-flow tech. The article flags broad investor fear that aggressive AI capex could pressure returns if rates stay elevated—SPCX weakness is likely to spill into the same crowded valuation trade. Key risk: Rates fall materially or AI capex converts into clear, near-term earnings acceleration, lifting the whole complex.<br>Key Risk: Rates drop or AI capex shows near-term earnings power, lifting high-multiple peers.
SpaceX short interest rises to 181 million shares, or 28% of its tradable float.<br>Unrealised gains for short sellers have already reached approximately $3.88 billion.<br>Analysts largely bullish but lockup expiry could inject further volatility.
SpaceX has become one of Wall Street's biggest targets for short sellers just weeks after completing the largest initial public offering in history, as investors increasingly bet that the Elon Musk-led company's blockbuster valuation could come under pressure.<br>The stock briefly slipped below its $135 IPO price on Wednesday before recovering to close at $135.27, marking the first time it has traded below its debut price since listing on the Nasdaq last month.<br>Shares have now fallen about 10% over the past five trading sessions.<br>According to data compiled by S3 Partners, short interest in SpaceX has climbed to 181 million shares, representing 28% of the company's 646 million-share tradable float.<br>Bloomberg reported that this is the highest level ever recorded for a newly listed company during its first month of trading.<br>Unrealised gains for short sellers have already reached approximately $3.88 billion.<br>The pace of bearish positioning has accelerated sharply.<br>In the past week alone, investors added approximately 37 million shares worth about $5 billion to short positions.<br>S3 Partners' head of predictive analytics, Ihor Dusaniwsky, said the recent weakness in the stock, combined with the approaching expiry of insider lockup restrictions, has encouraged additional bearish bets.<br>"Recent share price weakness, combined with the approaching lockup expiration, is further stimulating short-selling demand," Dusaniwsky said.<br>Valuation concerns weigh on shares<br>The decline in SpaceX's shares comes after its highly anticipated IPO valued the company at about $2.1 trillion following its first day of trading.<br>Despite the recent pullback, the company still trades at around 49 times expected revenue, making it one of the most expensive large-cap technology companies on Wall Street.<br>By comparison, fellow Musk-backed company Tesla trades at roughly 15 times expected revenue.<br>Investors have also become more cautious after SpaceX raised $25 billion through the bond market last month to finance the expansion of its artificial intelligence infrastructure.<br>The move added to broader concerns that aggressive AI-related capital spending across the technology sector could pressure future returns, particularly if interest rates remain elevated.<br>"The stock's retreat seems to be a combination of profit-taking, valuation reassessment and the unwinding of extremely bullish positioning following one of the most anticipated listings in recent years," said Daniela Hathorn, senior market analyst at Capital.com in a Reuters report.
Lockup expiry and earnings in focus<br>Investors are preparing for two key catalysts that could increase volatility over the coming weeks.<br>The company is expected to conduct its 13th Starship test flight, while second-quarter earnings are anticipated during the first week of August.<br>Attention is also turning to the expiry of lockup restrictions for insiders.<br>Although SpaceX completed the largest IPO in US history, less than 5% of its outstanding shares were made available for public trading, creating a scarcity that helped propel the stock following its debut.<br>As lockup restrictions begin to expire, millions of additional shares could...