SpaceX Faces Its First Earnings Test With a $116 Billion Share Flood Looming

SpaceX faces record short interest as 911.5M shares unlock Aug 6, doubling float and pressuring stock near 52-week low.

The calendar has rarely looked more unforgiving for a newly listed company. Two days after SpaceX publishes its inaugural quarterly report as a public company, roughly 911.5 million shares — a package worth about $116 billion — become eligible for trading when the IPO lock-up expires on August 6. That wave of newly tradable stock, held by early investors, managers and insiders, arrives just as the shares are hovering barely above their 52-week low.

The arithmetic is stark. Only around 640 million shares currently circulate freely, representing roughly 5 percent of all outstanding equity. Once the lock-up lifts, that free float roughly doubles to about 12 percent, according to S3 Partners. The sheer scale of the release has drawn one of the largest short positions ever assembled against a single US stock.

Record Bearish Bets Pile Up

Leviathan short sellers have been building their positions with unusual speed. S3 Partners counted 219.3 million shares sold short at the end of July — about 34 percent of the free float, with a market value of $24.6 billion. That exceeds even the bearish positioning against Tesla, Elon Musk's other major public company. Data provider Ortex puts the figure slightly lower at roughly 196 million shares, or about 31 percent of the float, but the direction is unmistakable: at the IPO, short interest stood at just 5 to 7 percent of tradable shares.

Sam Pierson, research director at S3 Partners, frames the trade simply: the bet is that the lock-up release will overwhelm any positive news in the earnings report. "Nobody expects the quarterly numbers to be strong enough to absorb the wave of newly tradable shares," he said.

The stock's recent trajectory explains the conviction. After closing Friday at €93.96, down 3.48 percent on the day, the shares have shed roughly 32 percent over the past month. That leaves them just 0.59 percent above the 52-week low of €93.41 and more than half below the June 16 record of €194.46. The 14-day relative strength index of 31.0 points to oversold conditions, while annualized 30-day volatility of 54.45 percent underscores how frayed trading has become.

A Founder's Fortune Shrinks

The sell-off has taken a heavy toll on Musk's personal balance sheet. His net worth has contracted by roughly $600 billion over the past month, sliding from about $1.45 trillion after the IPO to approximately $684 billion. The decline reflects both the falling share price and the sheer size of his stake in the company.

Growth Numbers Tell a Two-Sided Story

The financials disclosed at the time of the listing offer ammunition to both bulls and bears. Starlink, the satellite broadband division, ended the first quarter with 10.3 million subscribers, up 105 percent year over year, and generated $11.3 billion in revenue last year. But average revenue per user has fallen from $86 to $66 per month, even as production costs for receiving terminals dropped 59 percent since 2022. The company posted a net loss of $4.3 billion in the first quarter of 2026; on a trailing twelve-month basis, revenue reached $19.3 billion against a net loss of $9.36 billion.

Analysts expect revenue to nearly triple by the fourth quarter, driven largely by short-term AI compute contracts with Anthropic and Google. That reliance on cancellable compute deals, however, is precisely what skeptics cite as a structural weakness in the long-term earnings story.

Wall Street Stays Constructive — Mostly

Despite the price collapse, the analyst community has largely held its ground. Since the listing, 23 buy ratings stand against six holds and one sell, with an average price target of $239.04, according to TipRanks. S&P Global's survey of 34 analysts produces a similar consensus: a buy recommendation with a mean target of $236.71, though individual estimates range wildly from $62 to $800. HSBC initiated coverage in late July with a hold rating and a $115 target.

Cathie Wood's Ark Invest has been buying the dip, describing SpaceX as a critical enabler of the future space economy and projecting gross profits in the hundreds of billions by 2030, led by the satellite broadband business. Others counter with valuation math: the stock trades at 77 times revenue, well above Palantir's 57.

Beyond the Lock-Up: What Comes Next

Pierson points to three factors investors should track beyond the immediate lock-up event. Further share releases are scheduled in stages, followed by potential S&P 500 inclusion — realistically no earlier than mid-2027 given index waiting periods, though the market may already be pricing that in. A possible merger with Tesla could accelerate index eligibility, he notes.

Technical problems with the Starship rocket add another layer of uncertainty. Heat shield issues recently pushed the stock to a new low, though the FAA has approved the next test flight after corrective measures on booster return. The broader business model rests on a 70 percent share of commercial rocket launches, a $2.6 billion NASA Commercial Crew contract, and Starlink's subscriber growth — a mix that will face its first public-market scrutiny when the numbers land after the bell on Tuesday.