Short Sellers Bank $8.7 Billion as SpaceX Stock Drops 40% and Starship Deploys Live Starlink Satellites

SpaceX has hit turbulent skies since its blockbuster IPO on June 12, 2026. The stock, which opened at $150 and soared to a record $225.64 just days later, has since shed roughly 40% of its value, sliding below its $135 offering price to a low of $132.15 on July 15. In euro terms, the shares now trade at €116.26, barely 0.48% above the 52-week floor of €115.70. The sell-off has been sharp: a 32% loss in the last 30 days alone erased the gains from a debut that valued the company at $1.75 trillion and briefly pushed its market cap past $2.6 trillion.

The catalyst for the next chapter may be the thirteenth test flight of Starship, which lifted off from Starbase in Texas on July 16 at 17:45 local time. This is the second launch of the redesigned “Version 3” of the mega-rocket, and the first time it carries a live payload: 20 operational Starlink V3 satellites equipped with high-performance laser links. The flight plan calls for an in-orbit engine burn, satellite deployment, and heat-shield data collection — all prerequisites for SpaceX to attempt an orbital mission on the next test. The FAA cleared the launch on Monday after closing its investigation into the May failure of Flight 12, which traced the loss of the Super Heavy booster to heat damage on propulsion components and misconfigured engine alarms. SpaceX responded with hardware upgrades to the Raptor engines’ relight reliability and a revised ignition sequence for a more stable stage separation.

Sandwiching the Starship milestone, a Falcon 9 rocket launched from Vandenberg Space Force Base in California, carrying 21 communications satellites for the Space Development Agency under the U.S. military’s Proliferated Warfighter Space Architecture. The dual-mission day underscores SpaceX’s dual revenue stream: reusable launcher services for government and commercial clients, plus the satellite-internet network that generated roughly $11.4 billion in revenue in 2025.

Yet the operational successes have done little to calm the market. The stock’s annualized volatility stands at 93.65%, and selling pressure has been relentless. Behind the slide are profit-taking, valuation concerns amid massive AI infrastructure spending, fears of another Federal Reserve rate hike, and a worsening bottom line. SpaceX posted a net loss of $4.9 billion for 2025 and another $4.3 billion loss in the first quarter of 2026. In June, the company issued $25 billion in bonds to finance AI-related capital outlays.

Should investors sell immediately? Or is it worth buying SpaceX?

The bearish bets are mounting. According to TipRanks, short interest surged from roughly 40 million shares to about 185 million shares in a matter of weeks, representing nearly 29% of the free float and a notional value of around $25 billion. That makes SpaceX one of the most heavily shorted new listings in history. Data firm Ortex puts unrealized short-seller profits at $8.7 billion, while S3 Partners earlier recorded $3.88 billion. In the past week alone, new short positions worth approximately $5 billion were opened.

The next pressure point is the expiration of the lock-up period, expected shortly after the company’s first quarterly report as a public entity in early August. At current prices, roughly 911.5 million shares worth about $123 billion will become tradable, a massive supply increase given that only about 5% of shares are currently in the free float. Should the stock rise above $175.50, lock-up terms could release an additional 455.8 million shares, potentially lifting the float to 40% by December 8. Elon Musk’s own stake of about 60% remains locked until mid-2027.

Analyst opinions span a breathtaking range. Twenty-seven of 32 analysts surveyed recommend buying, with a consensus price target between $236 and $247. Raymond James’ Brian Gesuale stands out with a $800 target, implying a valuation of $8.7 trillion. JPMorgan’s Doug Anmuth reiterates $225, Needham raised to $250, and Morgan Stanley sees $300. On the bear side, CFRA’s Keith Snyder has a rare sell rating at $115, demanding tangible growth rather than speculation, while Morningstar values the stock at just $63. Citigroup, covered in the other source, offers a long-term target of $900.

Whether the Starship flight and its live Starlink deployment can shift sentiment remains uncertain. SpaceX has invested over $15 billion in Starship development and holds a $4 billion NASA contract for a lunar landing as early as 2028. New GPU-rental deals with Anthropic and Google could drive revenue from roughly $18 billion to as much as $62 billion next year, according to some models. But first the company must navigate the lock-up deluge and its maiden earnings call — a report that will test whether the growth story can withstand the weight of $25 billion in new bonds, $4.3 billion in quarterly losses, and an army of short sellers sitting on billions in paper gains.