SpaceX Shares Drop 20% Below IPO, Short Interest Rises, As AI Spend Soars

SpaceX stock ended the first day of its insider share lockup period at $111.17, down 20% from the IPO price of $135 and well below its June peak of $225.64. More ominously, short selling bears pushed short interest to 36% of the float, or shares outstanding, implying that Wall Street believes the stock is overvalued by retail investor fanboys and girls who are obsessed by their belief in Elon Musk. 

Many retail investors think this is a buying opportunity, but professional investors do not share their optimism, sensing that SpaceX is incapable of meeting its financial obligations due to massive investments in data centers and other AI-related expenses. While not a total vote of no confidence in the company and its leader, this is a serious expression of skepticism in its prospects. JL

Nicolas Owens reports in Morningstar, Cris Tolomia reports in Quartz:

SpaceX stock touched a new low on Thursday as up to 911.5 million shares held by insiders became eligible for sale for the first time since the company went public in June. The stock dipped to $105.11 in early trading before bouncing back to $111.17. As of Wednesday's close, SpaceX shares had shed more than half their value from the June 16 peak of $225.64 and were about 20% below the $135 IPO price. Short sellers increased bets against the stock ahead of the unlock. Bearish positioning had pushed short interest to 36% of float by Wednesday's close. Those short sellers are sitting on paper profits exceeding $9 billion as a result of the share-price retreat. With its marked volatility since the IPO, investors are still factoring more optimistic scenarios for Starship reusability and the commercial advantage of orbital datacenters than are most probable at this point. Said Morningstar, "We see SpaceX’s stock as overvalued: traded at twice our fair value estimate"

SpaceX stock touched a new low on Thursday as up to 911.5 million shares held by insiders became eligible for sale for the first time since the company went public in June. 

The stock dipped to $105.11 in early trading before bouncing back to $111.17, a gain of 2.6%. As of Wednesday's close, SpaceX shares had shed more than half their value from the June 16 peak of $225.64 and were about 20% below the $135 IPO price.

The newly eligible shares, valued at roughly $100 billion at current prices, bring the total tradable share count to 1.55 billion, up from the 639 million that changed hands when Space Exploration Technologies Corp. completed its IPO, according to Bloomberg. The 911.5 million unlocked shares represent more than 140% of the stock that was available after the IPO.   

Thursday's unlock follows a turbulent stretch for SpaceX stock. Shares fell roughly 14% on Wednesday after the company's first earnings report showed capital expenditures more than twice as high as revenue, according to CNBC. Revenue for the quarter came in at $7.8 billion, above Wall Street projections of $6.8 billion, according to Barron's. 

Short sellers increased bets against the stock ahead of the unlock. Bearish positioning had pushed short interest to 36% of float by Wednesday's close, per Bloomberg, which cited figures from S3 Partners LLC. Those short sellers are sitting on paper profits exceeding $9 billion as a result of the share-price retreat.

Second-quarter revenue, up 92% compared with 2025, led by an eye-watering but not surprising sevenfold increase in AI solutions revenue from neocloud rentals. Launch and Starlink grew 29% and 67%. Investments of $3.5 billion in R&D resulted in a $143 million operating loss.

Why it matters: Notwithstanding a sizable market opportunity for profitable growth in Starlink, the widest range of potential outcomes of SpaceX SPCX’s future value lies in its artificial intelligence ventures, which are currently predicated on rapidly deploying computing capacity and renting it out. 

The bottom line: We haven’t altered our forecast based on second-quarter results, and we reaffirm our $62 fair value estimate for narrow-moat SpaceX’s stock.

• Even with its marked volatility since the IPO, we think investors are still factoring more optimistic scenarios for Starship reusability and the commercial advantage of orbital datacenters than are most probable at this point.
• We see SpaceX’s stock as overvalued: they traded at around twice our fair value estimate