Elon Musk Warns Short Sellers as SpaceX Shares Plunge

Shares of Space Exploration Technologies Corp. fell 36% from their intraday high to approximately $112 following the company's initial public offering. Short sellers have aggressively targeted the aerospace company, with approximately 35% of public shares, or 165 million shares, currently being shorted. S3 Partners described the increasing short interest as a super bearish sign for the company.

Elon Musk, the founder and CEO of SpaceX, responded to the market activity by warning on X that the survival probability for firms maintaining significant short positions over time is very low.

Market analysts expect further short-term declines as the company prepares to release its second-quarter earnings report on August 4. Additionally, an insider lockup period expires on August 6, potentially allowing the sale of up to 911.5 million shares. The stock's decline is also linked to a broader investor sell-off in the AI sector, which recently affected the hedge fund Delta.