Traders betting that SpaceX stock would fall are up an estimated $8.7 billion in unrealized gains as of July 16, 2026. The stock has dropped below its June 12 IPO price of $160.95, according to Ortex data cited by Reuters. SPCX closed at $135.27 on July 15, per WSJ market data — roughly 16% below the offering price.

Here is how this kind of bet works. A trader borrows shares of a stock and sells them immediately. If the stock price drops, the trader buys back the shares at the lower price, returns them to the lender, and keeps the difference as profit. This is called short selling. The $8.7 billion figure is a "paper profit," meaning the gains exist at current market prices but the traders have not yet closed their trades to lock them in.

The number of shares being shorted climbed fast. On June 23, CNBC reported roughly 40 million shares sold short — about 5% to 7% of the shares available for public trading. By July 2, Yahoo Finance reported that number at approximately 83 million shares, or 13%. The Wall Street Journal recorded 111.3 million shares short as of June 30. Reuters reported 196 million shares short, about 31%, on July 1. By July 16, Invezz reported short interest at 181 million shares, making SPCX Wall Street's most shorted new stock. Ortex, whose real-time data may differ from exchange-settlement figures, pegged short interest at 26.07% of available shares, with a total value of $23.18 billion.

The cost of borrowing SpaceX shares to short them has been very low — just 1–3% per year, according to S3 Partners. Reuters reported on June 23 that short sellers were finding it easier to borrow SpaceX shares, meaning more shares were available for lending as the post-IPO period progressed.

SpaceX closed its initial public offering on June 15, 2026, raising approximately $85 billion. A week later, on June 22, the company priced a $25 billion bond issuance, which included $7.0 billion of 5.350% senior notes. Before the IPO, SpaceX's EU Prospectus for its Class A common stock was approved by BaFin, Germany's Federal Financial Supervisory Authority, on June 5.

Nasdaq added SPCX to the Nasdaq-100 index effective July 7, according to Reuters. That move typically requires passive index funds — funds that automatically buy whatever stocks are in an index — to purchase the stock. At that point, SPCX shares had gained about 1% since their debut. That modest gain has since been wiped out and then some.

The speed of the short-selling surge stands out. In about four weeks, SPCX went from 5–7% of available shares being shorted in late June to above 26% by mid-July. Ortex identified SPCX as the biggest mover in short interest across its entire coverage universe, with the ratio jumping from 3.65% to 26.27%.

For context, short interest above 20% of a stock's available shares is relatively rare across the broader market. It usually signals that investors either deeply disagree about a company's value or are reacting to a specific event. In SPCX's case, the low borrowing cost suggests plenty of shares are available to lend. That means there is little risk of a short squeeze — a situation where a rising stock price forces short sellers to buy back shares quickly, driving the price even higher. A squeeze usually happens when borrowing fees spike into double or triple digits as lendable shares become scarce, which has not happened here.

The $8.7 billion in paper profit reported by Reuters is based on market prices as of July 16 and does not represent actual cashed-in gains. Short sellers remain exposed to any price rebound, and SPCX's addition to the Nasdaq-100 means index funds will keep buying the stock regardless of sentiment.

Several factors converged here: a large IPO that the market judged too expensive within weeks; growing availability of shares to borrow, which kept costs low; index inclusion that created automatic buying; and a short-selling community that grew from cautious to aggressive in under a month. Whether the shorts are right about SpaceX's business prospects is a separate question from whether the trade is working in their favor — and for now, it is.

In my view, the SPCX short story is less about skepticism specific to SpaceX and more about the simple economics of betting against a newly public giant when shares are easy to borrow. When borrowing costs are just 1–3% per year, the expense of holding the trade is tiny compared to what a trader could gain if the stock keeps falling. Add in a stock that the market has already decided was priced too high, and you get conditions where shorting was cheap, easy, and so far profitable. The open question is whether the automatic buying from index funds, the company's actual business performance, or some combination of the two eventually pushes the stock back up — or whether SPCX simply joins the list of high-profile IPOs where early excitement outran reality.