As Elon Musk prepares to drop the historic $75B SpaceX (SPCX) IPO on Nasdaq, Wall Street bears are facing a terrifying reality check. On paper, SpaceX is a textbook target for short-sellers: it is fundamentally loss-making, carries corporate governance red flags, and is coming to market at a “grotesquely overvalued” $1.75 Trillion valuation.
Yet, the smart money is heavily warning short-sellers to back off. Here is why betting against the rocket maker is too hot to handle:
🚀 The Brutal $27 Billion Tesla Ghost Shorting Elon Musk has historically been a fast track to bankruptcy. According to S3 Partners, Tesla short-sellers have suffered a catastrophic $27 billion in losses since 2021 alone, watched the stock skyrocket over 2,500% in a decade, and endured Musk’s legendary public trolling—including his infamous “funding secured” tweet that inflicted $1.3B in single-day bear losses.
🔒 The Illiquidity Trap (Under 5% Float) While the $75B raise is the largest in global history, the actual public float will be less than 5% of outstanding shares. This tiny supply, combined with massive institutional demand and retail FOMO, means the cost and difficulty of borrowing shares to short immediately after the IPO will be near-impossible. Prominent bears (like Stanphyl Capital) are forcing themselves to wait until post-IPO “unlock dates” before even touching a short position.
📈 The Index Buying Juggernaut Skeptics face an immediate wall of automated cash. Due to changed exchange rules, SpaceX has secured fast-entry status into the Nasdaq 100. This means massive passive index funds will be legally forced to aggressively buy up the limited stock the second it goes live, creating an artificial upward price squeeze.
💀 A Dying Playbook for Bears Short-sellers are already severely wounded. The Goldman Sachs Most Shorted Index is up 29% this year, on track for its 4th straight year of gains, while recent high-profile fraud convictions of activist shorts have left the entire practice chilled. Risk experts note that even if SpaceX pops 100% on day one, its parabolic momentum makes it the single most dangerous short play on Wall Street.
Final pricing locks on June 11. The consensus? Do not step in front of this rocket.