S3 said SPCX looks more like “normal price discovery” than a “classic short-squeeze candidate.”
- About 40 million SpaceX shares are sold short, representing 5% to 7% of its tradable float of 625 million shares, according to S3 Partners.
- A Coatue investor told CNBC that the firm is holding its SpaceX stake through the six-month lockup, saying selling winners too early “rarely works.”
- Former SEC Chair Gary Gensler warned that SpaceX’s IPO wave could face a “great rebalancing” as VCs cut risk after lockups expire.
SpaceX shares rose 1% premarket on Wednesday, bucking concerns over rising short interest, lockup-related selling pressure, and a former SEC chair’s warning that IPO excitement could give way to a “great rebalancing.”
SPCX stock fell as low as $147.11 early Tuesday, slipping below the $150 level from its first Nasdaq trading day after the June 11 IPO. The stock later recovered, ending Tuesday up about 1% at near $156.
SPCX Short Bets Build, But No Squeeze Yet
About 40 million SpaceX shares are currently sold short, representing roughly 5% to 7% of the company’s publicly tradable float of about 625 million shares, according to S3 Partners. Borrow conditions also do not point to the squeeze pressure. More than 30 million SpaceX shares are available to borrow, while annualized borrowing fees are below 1%, S3 said, according to CNBC.
“SPCX has attracted active short-selling interest, but the data suggest this is far from a supply-constrained short,” said Matthew Unterman, head of research at S3. “The current setup looks more like normal price discovery than a classic short-squeeze candidate.”
Coatue Says It’s Holding SPCX
Coatue investor said in a CNBC interview that the firm is not rushing to cash out. When asked whether Coatue would keep or sell its SpaceX shares, he said, “I’m going to keep them,” noting that the shares must be held for six months after receipt. After the lockup, he said the decision becomes “more of a portfolio decision,” based on how large SpaceX becomes relative to the rest of the firm’s holdings.
“We own a significant amount of SpaceX,” he said, while adding that some of his biggest mistakes came from “optimizing for the short run.” He pointed to Nvidia as a lesson, calling his decision to sell “one of the bigger mistakes” he had made. “Sometimes you’re like, ‘Oh, maybe I’m so clever. I can sell out of this and buy that.’ It rarely works,” he said.
Former SEC Flags ‘Great Rebalancing’ Risk
Former SEC Chair Gary Gensler offered a more cautious view, saying that the wave of mega IPOs, including SpaceX, could be a “tell” about where the market cycle stands. He said that markets are funding a major AI infrastructure boom, but warned that some valuations are running at “100, 140 times revenues without earnings,” according to Bloomberg.
Gensler said it is possible that the market looks back in six months and finds the IPO wave was “fine.” However, he also warned there is an “equal and better chance” that venture capitalists and sovereign wealth funds begin selling as lockups expire. “I call it the great rebalancing,” Gensler said. “All those venture capitalists and sovereign wealth funds, they’re going to want to take risk off the page.”
He said tha investors could move to reduce “a third, a half, maybe three quarters” of their exposure, creating “a lot of selling pressure” as shares become available.
How Do Retail Traders Feel About SPCX?
On Stocktwits, retail sentiment for SPCX was ‘bearish’ amid a 35% decline in 24-hour message volumes.
One user said, “$SPCX look there is a bull and bear argument here. But im a buy and hold forever with this stock... I'm betting on ten years. While i would love to see a dip to buy more I just don't see a dip below 100...if I do, i will triple down. I only have 200 shares now but this stock is epic in my humble opinion…”
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Another user said, $SPCX All IPO investors in the open market are underwater. In a shady overpriced overall market that will probably keep pressure on the stonk. Underwriters could have very well shorted the $229 pump on the 2030 1 Trillion Revenue tweet. If so they will ride it down. No fun being a debbie downer but it is an insiders game.”
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