Wall Street Short Sellers Are Making a Fortune Off Elon Musk’s SpaceX Stock Crash

Elon Musk became the world's first trillionaire the day SpaceX went public.

One month later, that title is looking a lot shakier on Wall Street.

Short sellers are already banking a fortune off Musk's stock collapse – and the number is staggering.

Short Sellers Piled Up $25 Billion in Bets Against Musk's Rocket Company

SpaceX priced its IPO at $135 a share on June 12.

Within days the stock climbed past $225 – a 41 percent peak-to-trough swing from Wednesday's price – briefly making the company worth more than tech giants Amazon and Microsoft.

Then Wall Street's bears smelled blood.

Shares slid to $132.62 on Wednesday, dipping below that $135 IPO price for the first time since Musk rang the opening bell.

Short sellers are now sitting on nearly $8.7 billion in paper profit, according to data from Ortex.

S3 Partners data show short sellers have built positions in roughly 185 million shares – nearly 29 percent of the float – worth an estimated $25 billion.

Three weeks ago that figure sat at just 5 to 7 percent of the float.

S3's Matthew Unterman said short sellers have shown "continuous demand" building speculative positions since the IPO.

Musk personally holds 42 percent of the shares outstanding, and none of it can be sold before June 2027.

That hasn't stopped the hedge funds from swarming.

Wall Street Analysts Are Lining Up to Trash the Valuation

Interactive Brokers chief market analyst Steve Sosnick admitted investors have had no fresh reminder of "why they bought SpaceX."

CFRA slapped a sell rating on the stock with a $115 price target – a 29 percent haircut from where shares traded at the time.

Morningstar's Nicolas Owens went even further, valuing SpaceX at just $63 a share.

Bayes Business School lecturer Paulina Roszkowska said investors deserve more than lofty talk about data centers in orbit for the tens of billions SpaceX is asking them to hand over.

Its capital spending more than doubled to $10.1 billion in the first quarter alone, with most of it poured into AI infrastructure.

Musk's Grok Merger Handed the Shorts Their Opening

SpaceX's stock trouble didn't start with rockets.

It started when Musk folded his AI startup xAI into the company just before the IPO.

That decision tied SpaceX's fortunes to Grok, and Grok has been a mess.

The chatbot has been caught generating nonconsensual sexualized images of real people.

Before the merger, the public's fascination with rockets had shielded SpaceX from the usual Musk backlash.

Now the company eats every headline written about Grok.

One notable gut-punch came when Starlink slashed prices in Memphis, Tennessee amid local anger over a massive data center project – and the stock dropped 8 percent in a single day.

This Is the Same Playbook Wall Street Ran on Tesla

Musk has seen this movie before.

Short sellers made $16.2 billion betting against Tesla in just three months last year as that stock lost more than half its value.

Musk spent years mocking short sellers on Tesla, even selling "short shorts" merchandise to rub it in their faces.

They've lost $64.5 billion total shorting Tesla since its 2010 IPO.

Wall Street bears are betting the SpaceX story ends differently.

By December, roughly half of SpaceX's total share count will be freed up for trading for the first time.

Ortex says the short position is now so large that a single dollar of movement in the stock swings more than $300 million for the bears.

That means this fight is about to get a lot more violent in both directions.

Musk built a company that put men back on a path to the moon and strapped satellites over every corner of the globe.

The hedge funds circling SpaceX right now are betting the ending changes this time.

History says Musk is about to sell them the same short shorts all over again.

Sources:

• Lucas Nolan, "SpaceX Share Price Falls Below IPO Level a Month After Elon Musk's Market Debut," Breitbart News, July 16, 2026.
• Saqib Iqbal Ahmed, "Short sellers rack up $8.7 billion profit as SpaceX slips below IPO price," Reuters, July 16, 2026.
• "Short sellers load up against SpaceX as stock drops below IPO price," CNBC, July 16, 2026.
• "Short Sellers Are Having a Field Day Betting Against SpaceX as Shares Continue to Slip," Futurism, July 16, 2026.
• Nora Redmond, "Tesla short sellers are making a fortune out of the backlash against Elon Musk," Business Insider.