SpaceX Stock Surges as Short Sellers Liquidate Bearish Bets
New York, Thursday, 13 August 2026.
SpaceX shares rebounded over 40% from recent lows to $146.15 as short interest plunged from 34% to 11%. Forced short covering and an expanded float drove the rapid recovery.
Short Interest Dynamics and Market Reversal
The rapid unwinding of bearish positions marks a significant shift in market sentiment surrounding the commercial space pioneer. According to data from S3 Partners, short interest in SpaceX plummeted to roughly 11% of publicly traded shares on Wednesday, 12 August 2026, down from a peak of 34% recorded the previous week [1][3]. This sharp reversal highlights a diminishing appetite for bearish bets against the company as short sellers face mounting squeeze pressures. Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, noted that investors who intended to short the stock have largely exhausted their resources, stating, “Only so much money you can put into a trade” [1][5]. The reduction in short interest was driven by active short covering, where investors bought back shares to exit their positions, alongside a mechanically reduced short interest due to a larger tradable float [3][5].
Price Action and Liquidity Events
SpaceX shares rose significantly during the period, with the stock closing at $146.15 on 12 August 2026, marking a 9.75% daily gain [4]. The rebound placed the stock price approximately 41% above the low recorded on 3 August 2026, recovering from the initial post-earnings slump [1][3]. This price action coincided with a major liquidity event on 6 August 2026, when an initial lockup period expired, releasing over 911 million SpaceX shares for trading [3][5]. This unlock exceeded the 639 million shares sold during the company’s initial public offering, significantly increasing the tradable float [1][3]. Despite the increased supply, active short covering contributed to the decline in short interest as a percentage of the float, supporting the stock price recovery [3][5].
Valuation Concerns and Fundamental Analysis
While the stock price has surged, some analysts warn investors to separate trading patterns from underlying fundamentals. Morningstar maintains a $62 fair-value estimate for SpaceX, implying a potential downside of 57.578 percent from current levels [5]. Dave Sekera, Morningstar’s Chief U.S. Market Strategist, advised that investors need to “divorce what’s going on with the fundamentals of the company and the valuation of the company versus how it’s going to trade in the marketplace” [5]. Concerns stem from high capital expenditures, which totaled $18.4 billion in the second quarter of 2026, with $15.8 billion allocated specifically to AI infrastructure [5]. Although SpaceX reported $7.8 billion in revenue for the quarter, led by significant growth in its AI business, the company maintains an operating loss due to high research and development spending [5][8].
Future Catalysts and Share Unlocks
Looking ahead, the market faces additional supply shocks from scheduled share lockup expirations. An additional 319 million shares are potentially eligible for sale starting 20 August 2026, followed by roughly 700 million shares unlocking in September 2026 and another 700 million in October 2026 [1][5]. SpaceX targets an annualized revenue run rate of at least $100 billion by the end of 2026, driven by its AI segment and Starlink growth [5]. However, the pending status of these future unlocks remains a key factor for investors monitoring liquidity. Bob Sloan, founder of S3 Partners, described the trade as potentially the “frothiest trade ever,” noting its impact bleeds into other equity sectors [2]. As the company continues to expand its AI compute capacity, currently standing at 1.4 gigawatts, the balance between capital expenditure and revenue generation will remain critical [4].