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Elon Musk Says the Short Sellers Betting Against SpaceX Have a "Very Low" Survival Probability. Their Bets Now Equal 32% of the Float.
The Motley Fool • • business
Key Points:
- SpaceX CEO Elon Musk highlighted the risk for investors holding significant short positions in the company, emphasizing SpaceX’s long-term value potential beyond Earth.
- Approximately 206 million SpaceX shares, or 32% of the publicly tradable shares, are currently sold short, representing about $25 billion in bearish bets, with the short interest rapidly increasing over the past month.
- SpaceX is set to release its first quarterly earnings report as a public company on August 4, followed by the expiration of lock-up restrictions that will increase the tradable share float, potentially easing short-selling pressures.
- Despite strong revenue growth of 33% year-over-year, SpaceX’s market valuation of $1.6 trillion, trading at over 80 times sales, and ongoing losses fuel skepticism about whether its current stock price fully reflects future potential.
- While a short squeeze could occur if earnings impress and force shorts to cover, the impending increase in share float due to lock-up expirations may reduce the risk of a squeeze by making shares easier to borrow and sell.
