SpaceX Shares Hit by Starship Abort and Surging Short Bets as Lockup Overhang Looms

SpaceX shares fall 13% in a week after Starship test abort; short interest surges to 29% as $123B in locked-up shares near expiration, while analysts remain bullish.

SpaceX’s stock, already reeling from a post-IPO slide that erased more than a trillion dollars in market value, took another blow this week when the 13th test flight of its Starship rocket was aborted seconds before liftoff. The shares closed at €110.34, down 3.75% on the day, pushing the week’s decline past 13% and extending the 30-day loss to 33.63% — a rout that has brought the equity within 2.79% of its 52-week low of €107.34.

The failed launch on July 16 triggered an automatic abort when four of the 33 Raptor engines on the Super Heavy booster failed to ignite. CEO Elon Musk said two of those engines need replacing, and a new attempt is penciled in for Monday, July 20, with a launch window opening at 18:45 Eastern time. The mission was to carry 20 Starlink V3 satellites — the first operational payload of the test series — and was seen as a key milestone before Starship can be cleared for orbital cargo flights.

The delay carries implications well beyond the company’s own schedule. NASA is counting on a modified version of Starship, dubbed HLS, to ferry astronauts to the lunar surface under the Artemis program. The space agency’s Artemis III mission, now targeting 2027, has already been redesigned to test rendezvous and docking maneuvers in Earth orbit before a crewed landing on Artemis IV is attempted in early 2028. Every setback in the test program tightens that timeline further.

Market mechanics have compounded the damage. Short interest has exploded from 5–7% of free float three weeks ago to 29% today, representing 185 million shares worth roughly $25 billion, according to S3 Partners. Unrealized short-seller profits now stand at $8.7 billion, Ortex data show, while 49% of the free float is out on loan for shorting. The rapid buildup reflects growing conviction among bearish traders that the stock, which hit a record of over $225 in mid-June, still has room to fall.

A fresh wave of supply threatens to intensify the selling. After SpaceX reports quarterly earnings, 911.5 million shares — worth approximately $123 billion at current prices — will become tradable when the standard IPO lock-up period expires. Musk’s 42% stake remains locked until June 2027, but the flood of newly free shares could overwhelm the thin float. Just 4% of total shares are currently listed on the Nasdaq, a factor that has helped drive the stock’s 30-day annualised volatility to 92.5%.

Despite the brutal price action, most Wall Street analysts remain bullish. Morgan Stanley rates the stock Overweight with a $300 target, Bernstein has Outperform at $239, RBC at $225, and UBS at $210. Wedbush initiated coverage at Outperform with a $190 target, citing 12 million Starlink subscribers averaging $66 in monthly revenue per user and recent AI data-center deals with Anthropic and Google worth $28 billion. The firm also highlighted SpaceX’s inclusion in the Nasdaq-100 on July 7, which JPMorgan estimates could trigger $4.3 billion in index-driven buying. Piper Sandler stands as a notable outlier with a Neutral rating and $156 target. The consensus 12-month price target of $235.34 sits well above the current €110 level — a gap that underscores the tension between near-term technical pressure and long-term strategic bets on Starship and Starlink.

The coming days will test that optimism. If Monday’s launch succeeds, SpaceX can begin validating the Raptor engine fixes and moving closer to operational flights. A second abort in quick succession, however, could deepen the sell-off and give short sellers even more ammunition.