Musk Warns SpaceX Short Sellers: 'Survival Rate Very Low' as Stock Rebounds 3% to End 7-Day Slide

According to Barron's, SpaceX (SPCX-US) shares rebounded approximately 3.1% on Tuesday (21st), ending a seven-day consecutive decline. CEO Elon Musk's warning to short sellers, combined with analysts' views that the stock has become attractively priced, may have prompted partial short covering.

SpaceX's stock rose as high as $129.88 during Tuesday's session, closing at $123.54. Previously, the stock had declined for seven consecutive trading days, cumulatively dropping 21%, and falling about 47% from its all-time high near $226. It had also closed below the $135 IPO price for three consecutive trading days.

On Monday, Musk posted on social platform X that institutional short sellers who borrowed SpaceX shares to bet on a price decline have a 'very low survival rate.'

Currently, about 17% of SpaceX's tradable shares are shorted, a notably high level for a large tech company. In comparison, Apple (AAPL-US) has a short ratio of only about 1%. A high short interest increases the likelihood of a short squeeze; if the stock price rebounds, bearish investors may be forced to buy back shares to limit losses, further driving up the price.

The persistently high short ratio is partly due to the limited number of shares available in the market. Most of the company's shares are still held by early investors under trading restrictions. SpaceX is scheduled to release its second-quarter financial results on August 4, after which more shares may enter the market. This has raised investor concerns that early shareholders might sell to lock in profits once restrictions are lifted.

In addition to supply concerns, SpaceX has recently canceled multiple launch missions. On Monday, the company aborted the launch of a Falcon 9 rocket carrying 24 Starlink satellites just before liftoff, stating the payload was safe. Previously, SpaceX also canceled the 13th test flight of Starship due to engine issues detected before launch, with the flight now tentatively rescheduled for July 23.

Falcon 9 has executed hundreds of missions to date, completing over 80 launches since 2026. The Starship, still in development, is designed for full reusability and is expected to reduce orbital launch costs by about 90% compared to Falcon 9, supporting SpaceX's future plans such as building AI data centers in space.

Macquarie analyst Paul Golding stated on Monday that SpaceX's recent stock price has created an 'attractive entry point,' maintaining a 'Buy' rating with a $250 price target. FactSet data shows the average analyst target price for SpaceX is around $241.

Market attention will now focus on the Starship test flight on July 23 and the financial results to be released on August 4. A successful test or better-than-expected earnings could further improve market sentiment. However, with the gradual increase in tradable shares and the high short ratio, SpaceX's stock is likely to remain highly volatile in the short term.