Bears who bet against SpaceX are running out of ammunition.
That's the word from Ihor Dusaniwsky, managing director at the data firm S3 Partners, who tracks who is shorting which stocks. "Shorts that wanted to short are out of bullets," he said. "Only so much money you can put into a trade."
The numbers back him up. The metric known as short interest - the total number of shares borrowed and sold by investors expecting to repurchase them at a lower price - has fallen dramatically.
Two things caused the decline. First, some bearish investors closed their positions, buying back shares to exit their bets. Second, the company suddenly has a lot more tradable stock out there, which automatically shrinks the short-interest percentage.
That second part matters. Last over Thursday, 911 million shares became eligible for trading after the company's initial lockup period ended. A lockup is a waiting period after an IPO when early investors and insiders are barred from selling their stock. Once it expires, they can finally cash out.
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That batch of newly tradable shares represented about 7% of total shares outstanding. For context, the IPO had involved 639 million shares, and this newly unlocked block was even larger.
The short squeeze comes as SpaceX shares have climbed sharply from their post-earnings slump.
The initial drop happened after the company's first earnings report revealed something striking: capital spending more than doubled its revenue. Investors got spooked by the heavy spending, and the stock fell. But the rebound suggests buyers have decided the growth story is worth the price tag.
SpaceX's trajectory since its IPO has been defined by this tension between heavy spending and ambitious growth. The $135 listing price reflected high expectations, and the earnings report that followed underscored just how much capital the company is burning to fuel that growth. That mix helps explain why the post-earnings selloff was so sharp, and why the subsequent recovery has been equally dramatic.
The lockup story is not finished.
That's a lot of stock potentially hitting the market in the coming weeks. More tradable shares tend to increase volatility, since bigger trades are needed to move the price. It also makes it easier for new short positions to open if pessimism returns.
Lockup expirations are a common post-IPO event, and they often bring heightened volatility as the supply of available shares expands. In this case, the additional 911 million shares represent a meaningful portion of the float, which could amplify price swings in either direction. However, the fact that short interest has already declined significantly suggests many bears have already exited their positions, reducing the immediate potential for a short squeeze.
For everyday investors, this is worth watching. The next few weeks will tell you a lot about whether the rebound has staying power or whether the unlock wave brings fresh selling pressure. The short sellers may be out of bullets for now, but the market is about to get a much bigger supply of them.
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