SpaceX short sellers earn $8.7 billion gains as shares dip below IPO price

​Short sellers targeting SpaceX shares ​are sitting on an estimated $8.7 billion in paper profit ​since the rockets-to-AI firm’s initial public offering last month, as its stock slipped below the IPO price, according to data and analytics firm Ortex Technologies.

Short sellers, who borrow ‌shares to ⁠sell them ⁠and later buy them back at a lower price for a profit, have ​pressed their bearish bets on SpaceX as the company’s shares slipped toward its IPO price ​of $135 from a post-IPO high of $225.64. SpaceX shares have been volatile, experiencing brief bouts of strength before slipping back.

On Wednesday, the stock dropped below ​its initial public offering price for the ⁠first time before ‌recovering to close just above that level. “SpaceX has ​been a ​rollercoaster for the short sellers, and it has ended ⁠up firmly in their favor,” Ortex co-founder Peter Hillerberg said.

“Rather ​than take profits, the bears kept adding the whole ​way down.” Almost half of SpaceX’s tradable shares, about 49% of the free float, are now out on loan, according to Ortex. “We believe most of that is short selling,” Hillerberg said. SpaceX did not immediately respond to a request for comment.

SpaceX’s lofty valuation makes it ‌a target for short sellers skeptical of its rich price tag, but strong retail and institutional interest as well as ​CEO Elon Musk’s ​history of public battles ⁠against short sellers make bearish bets against the company a risky proposition. The weakness in SpaceX shares reflects in part investor concern over debt-funded AI spending.

The ​stock’s sizable short position could inject further volatility into the shares, with every dollar SpaceX shares move worth more than $300 million to the short side, Ortex estimates. That means the stock could swing hard in either direction. SpaceX shares were up about 1% to $136.28 on Thursday.