SpaceX Defies Lock-Up Logic as Short Sellers Get Caught in the Crossfire

SpaceX defies lock-up expiry with 15.66% gain, driven by short squeeze after strong Q2 earnings and record capex.

The script called for a sell-off. When a lock-up period expires, insiders and early backers are finally free to dump shares, and the market usually braces for an avalanche of supply. SpaceX, however, tore up that playbook on Friday, posting a 15.66% gain to close at EUR 115.14 — a move that market observers attribute to a classic short squeeze rather than a sudden wave of conviction.

More than 250 million shares, roughly 16% of the free float, are currently sold short. As the price climbed, those bearish bets were forced to cover, creating a feedback loop that pushed the stock to a two-day surge of roughly 22.53% and a seven-day gain of the same magnitude. The irony is thick: the very mechanism that was supposed to unlock selling pressure — the expiration of a lock-up covering around 911.5 million shares — instead became the catalyst for a buying panic.

A Quarter That Started With a Jolt

The squeeze had its ignition in the company's second-quarter earnings, released Tuesday. Revenue climbed 92% year over year to $7.8 billion, comfortably ahead of consensus estimates that hovered around $6.7–6.9 billion. The net loss narrowed to $541 million, while adjusted EBITDA nearly tripled. Starlink, the satellite connectivity arm, delivered an operating profit of $1.7 billion for the quarter, underpinned by 12 million subscribers and a constellation of more than 10,900 active satellites — roughly 75% of all active, steerable spacecraft in Earth orbit, according to the company.

But the numbers that spooked investors initially were the capital expenditures. The company plowed $18.4 billion into capex in a single quarter, largely directed at its AI infrastructure segment. Annualized, that spending rate blows past earlier analyst projections — a shock that sent the stock down 14% on Thursday, when more than 255 million shares changed hands, the heaviest trading volume since the first week after the IPO.

That sell-off proved short-lived. By Friday, the narrative had flipped entirely, with the lock-up expiry turning into a buying opportunity rather than an exit ramp.

Analysts Split Down the Middle

The post-earnings landscape has exposed a wide gulf in how Wall Street views the stock. Argus upgraded SpaceX from "Hold" to "Buy" on Friday, setting a price target of $160.00 and citing a projected revenue run-rate approaching $100 billion by 2026. Morningstar, by contrast, reaffirmed a "narrow" economic moat but pegged fair value at just $62.00 — a figure that implies the market is pricing in growth scenarios the firm considers far too optimistic.

The stock remains 40.79% below its 52-week high of EUR 194.46, though it sits comfortably above the 52-week low of EUR 91.04. With a 30-day annualized volatility of 89.75%, the trading action remains anything but calm.

Rockets, Contracts, and a Wayward Booster

Operationally, the cadence shows no sign of slowing. A Falcon 9 launched 24 Starlink satellites from Vandenberg Space Force Base on Saturday — the company's 92nd flight of the year. Two more missions are scheduled this week: a Starlink launch from California's SLC-4E on August 11, followed by the Globalstar-2-R mission from Florida on August 15.

Later this month, all eyes will turn to the 14th test flight of the Starship system. CEO Elon Musk confirmed during the earnings call that the company will attempt its first orbital payload deployment and a "catch" of the upper stage at the launch tower, targeted for late August. NASA also confirmed Friday that SpaceX is working under a fixed-price contract worth $843 million on the "U.S. Deorbit Vehicle," a modified Cargo Dragon capsule slated for delivery by the end of 2028.

Not every headline was favorable. A decommissioned Falcon 9 upper stage, left in orbit since a 2025 mission, made an uncontrolled reentry Wednesday, striking the lunar surface at roughly 5,400 miles per hour. The incident has yet to register any meaningful impact on the share price.

The Road Ahead

The immediate question is whether the squeeze has run its course or has further to go. The next major test arrives with third-quarter earnings, when an even larger tranche of shares becomes eligible for sale — a potential repeat of this week's volatility. For now, the market has delivered a clear verdict: the lock-up was a speed bump, not a wall.