SpaceX short interest has experienced a dramatic reversal, falling from a peak of 34% to approximately 11% of its tradable float within just seven days, according to S3 Partners data. As reported by CNBC, this represents a significant shift in market sentiment as short sellers abandon their bearish positions on the space exploration company. The decline comes as SpaceX shares have climbed approximately 35% in just five trading sessions since the lockup expiration on August 6, adding roughly $500 billion to the company's market capitalization and climbing back above their $135 IPO price. According to S3 Partners managing director Ihor Dusaniwsky, bearish traders have effectively run out of available positions to short, stating that "shorts that wanted to short are out of bullets." The short interest collapse is driven by two primary factors: some bearish investors closing their positions by buying back shares to exit their bets, and the company's sudden increase in tradable stock availability.
The short interest unwind coincides with SpaceX's substantial stock rebound, which has lifted the shares back to levels near their original IPO pricing. Last week, 911 million shares became eligible for trading after the company's initial lockup period ended, representing about 7% of total shares outstanding. This batch of newly tradable shares, which was even larger than the original IPO of 639 million shares, automatically shrinks the short-interest percentage as more shares become available for trading. The lockup expiry, which bars early investors and insiders from selling their stock, creates additional tradable float just as bears begin retreating from their positions. The rebound suggests buyers have decided the growth story is worth the price tag despite the company's heavy capital spending, which more than doubled its revenue in recent earnings. The release increased the company's free float to 1.55 billion shares, from 639 million shares that were available for trading when Space Exploration Technologies Corp debuted on Nasdaq.
The recovery has been supported by the 911 million share unlock, which added fresh tradable float just as bears began retreating from their positions. According to S3 Partners managing director Ihor Dusaniwsky, bearish traders have effectively run out of available positions to short, stating that "shorts that wanted to short are out of bullets." The rally has defied concerns about an impending wave of selling and offered investors some optimism that upcoming lock-up expirations may not trigger the heavy selling pressure that had been feared. SpaceX's positioning in "Delta 1" trading strategies has created ripple effects throughout the broader market, with these derivatives strategies using derivatives to mirror stock price moves without holding shares directly. The $148 support level that previously threatened further downside has instead become a catalyst for the current rebound.
The $148 support level that previously threatened further downside has instead become a catalyst for the current rebound. As reported by CNBC, the short-covering rally is creating momentum across adjacent space and AI-infrastructure sectors, with positioning data showing renewed momentum across the memory chip sector, where names tied to the shortage gained approximately 7% this week. The lockup story is not finished, with additional tradable shares potentially hitting the market in the coming weeks. Following the first batch of lock-up expirations, another 319 million shares could become eligible for trading on August 20, followed by around 700 million shares in September and a similar number in October. In June 2027, one of the final scheduled lock-up expirations will make Elon Musk's 6.4 billion Class A shares eligible for trading. The additional 911 million shares represent a meaningful portion of the float, which could amplify price swings in either direction as more shares become available for trading.
