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SpaceX shares slide as IPO-fueled hype gives way to crowded short trade
About 360 million shares on loan, roughly 56% of freely traded stock, highlight how crowded positioning can amplify moves if expectations shift.
SpaceX-linked shares have fallen sharply since their IPO excitement, with Yahoo Finance noting that shares were priced at $135, peaked at $225.64, and closed Friday at $115.07, leaving investors to weigh whether the downside has further to run or whether crowded trades will drive sudden swings. The article highlights that short sellers hold an estimated $15.5 billion of paper profits while also pointing to a change in who may be feeling the pressure. It argues that the risk now may not only be concentrated among those who chased the offering, but also among investors who assume the decline is an easy one-way trade. At Friday’s price, the company is valued at roughly $1.5 trillion, while valuation professor Aswath Damodaran estimated equity value at around $1.3 trillion before the IPO. Damodaran’s largest concern was the valuation assigned to the artificial intelligence business, saying the assumptions there are harder to defend than for Starlink or the launch operation.
The piece also cites market mechanics: around 360 million shares, representing roughly 56% of freely traded stock, were reportedly out on loan earlier last week, and Ortex data was used to say short sellers increased positions rather than simply taking profits. It warns that when heavily borrowed shares must eventually be bought back, even modest changes in expectations can create forced demand from investors positioned against the move.