The excitement over SpaceX's IPO has not yet subsided, but bearish sentiment is rapidly increasing. As the first earnings report since its listing and a massive stock unlock are approaching, short positions have accounted for 32% of the circulating shares, while Musk states that the probability of institutions shorting SpaceX "surviving in the long term is very low."

Source: Jin Ten Data

On August 4, after the close of the US stock market, SpaceX (SPCX.O) will release its first quarterly earnings report since going public. As this critical moment approaches, short selling funds continue to increase: according to estimates from S3 Partners, about 206 million shares of SpaceX are currently shorted, representing about 32% of its publicly traded circulating shares, with a nominal short position of approximately $25 billion.

This ratio has risen significantly recently. Data from S3 Partners shows that just last week, approximately 185 million shares of SpaceX were shorted, accounting for 29% of the circulating shares; about a month ago, the estimated short position was around 40 million shares, representing about 5% to 7%.

Matthew Unterman, Head of Research at S3, stated in an interview with CNBC: "We see that short sellers are continuously increasing their exposure as several key catalyst events approach, including the company's first earnings report as a publicly traded company and the subsequent expiration of the lock-up period." The expiration of the lock-up period typically means that shares held by early investors can enter the market for circulation, and is therefore regarded as a significant point that may impact stock price supply and demand.

On August 6, SpaceX will face the first large-scale stock unlock since its IPO. Based on its current scale, this will become one of the largest stock unlock events in capital market history: up to 911.5 million previously restricted shares will qualify for sale for the first time, corresponding to a market value of up to $116 billion. This timing follows closely after the company's first quarterly performance disclosure.

This round of unlocking is not the end. By the end of this year, several billion more shares will gradually gain trading qualifications. Since the unlocking is arranged in phases, the market is assessing how this uncommon rhythm may influence stock prices, liquidity, and market dynamics in the coming months.

Since completing the largest initial public offering in history last month, SpaceX's stock price has struggled to replicate the fervor seen at the early stages of its listing. As more shares gradually enter circulation, early investors and those who bought the company's stock in private markets may seek to cash in on substantial returns; at the same time, short sellers will also gain further space to increase bearish bets.

In response to the expanding short positions, Elon Musk posted on the X platform, warning that investors who short SpaceX may ultimately incur losses. He wrote: "Companies that maintain large short positions in SpaceX have a very low probability of surviving in the long term."

Musk also stated: "I have said that if we achieve our goals, the value of SpaceX will exceed that of Earth. This is obviously true." This statement continues his consistent high expectations for the company's long-term potential, but does not change the current market's divergence surrounding valuation and the expansion of circulating shares.

As the first earnings report approaches, investors are assessing SpaceX's long-term growth prospects, current valuation levels, and the potential impact of more shares entering circulation after the lock-up period ends. Bulls emphasize the company's leading position in the launch services market, the expansion of its Starlink business, and its artificial intelligence layout; skeptics focus on how much future growth potential is yet to be accounted for by the current stock price.

In terms of stock price, SpaceX rose about 3% on Tuesday, ending a seven-day streak of declines. Previously, Macquarie analysts reiterated their "outperform" rating for the stock and advised investors to buy on dips following recent weaknesses.

SpaceX's stock price rose to about $124 that day, but it is still below its IPO issuance price of $135. The stock has seen a noticeable decline since its listing, and the forthcoming earnings report is expected to provide investors with a more detailed display of its operational performance since the initial public offering, which may also become the direct trigger for the next round of contest between bulls and bears.