SpaceX Short Sellers Running Out of Bullets as Stock Rebounds 41% from Low

SpaceX's short sellers are rapidly exiting their positions as the stock surges 11% to $148, marking a 41% recovery from its August low. Short interest has plummeted to 11% of the company's float, down from a peak of 34%, driven by both reduced tradable shares and short covering.

Short Sellers' Retreat

■SpaceX's stock rose 11% on Wednesday, now trading 10% above its IPO price and 41% above its August low.

■S3 Partners notes that short sellers are 'out of bullets,' with limited capital available for further bearish bets.

■The decline in short interest reflects both the expiration of the initial lockup period (911M shares unlocked) and active short covering.

Stock's Recovery Dynamics

■The stock initially slumped 20% after disclosing capital expenditures exceeding twice its revenue in the first earnings report.

■The first lockup expiration unlocked 7% of outstanding shares, mechanically reducing short interest to 11%.

■Future unlocks (319M in August, 700M in September, 700M in October) could introduce volatility as institutional and early investors sell.

Markets are interpreting this as a vote of confidence in SpaceX's long-term growth ambitions. However, the high capital expenditure-to-revenue ratio remains a key risk factor for the tech sector's largest IPOs.