Short sellers who bet against SpaceX are scrambling to cover their positions as the newly public stock stages a strong rebound. According to data from S3 Partners, short interest in SpaceX fell to about 11% of publicly traded shares on Wednesday, down sharply from a peak of 34% last week.
The decline reflects a combination of bearish investors closing out their trades and a significant expansion of the stock’s tradable float following the first major lockup expiration. Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, put it bluntly: “Shorts that wanted to short are out of bullets. Only so much money you can put into a trade.”
A sharp rebound after a rocky start
SpaceX shares jumped 8% on Wednesday to around $144, lifting the stock about 7% above its $135 IPO price and roughly 38% above its Aug. 3 low. The rally comes after a turbulent debut for the rocket and satellite company, which went public only recently.
In its first earnings report last week, SpaceX disclosed that capital expenditures were more than twice its revenue, stoking concerns about the enormous spending required to fund its ambitions. That disclosure triggered a sell-off, and short sellers piled in, pushing short interest to unusually high levels relative to the stock’s limited public float.
But the dynamics shifted last Thursday, when just over 911 million SpaceX shares became eligible for trading following the expiration of an initial lockup period. That newly unlocked tranche represented roughly 7% of the company’s shares outstanding and exceeded the 639 million shares sold in the IPO.
Short covering adds fuel to the rally
The larger float mechanically reduced short interest as a percentage of tradable shares. But S3 notes that short covering has also contributed to the decline, as investors who wagered against SpaceX bought back shares to exit their positions. That buying pressure can amplify upward moves when a stock is already rallying, and it appears to have played a role in the recent surge.
Investors who short a stock borrow shares and sell them, hoping to buy them back later at a lower price. When they close those positions, they must buy shares, which creates demand in the market.
More lockup expirations ahead
The relief for shorts may be temporary, however. More supply is coming. On Aug. 20, another 319 million shares could unlock, followed by roughly 700 million in September and close to that number in October, according to the prospectus.
These additional unlocks could create fresh volatility by giving employees and early investors more opportunities to sell. At the same time, the larger float would make it easier for investors to establish new short positions if bearish sentiment returns.
For now, though, the short sellers who helped drive SpaceX’s post-IPO slump appear to be retreating, and the stock is reaping the benefits.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/12/spacex-short-sellers-are-running-out-of-bullets-as-stock-rebounds-38percent-off-low.html
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