Summary
S3 Partners estimates that about 5% to 7% of SpaceX’s free float - approximately 40 million shares - has been sold short. According to Sam Pierson, director of research at S3 Partners, borrowers are finding shares easier to source and are paying roughly 60 basis points to borrow them, a figure above the roughly 30 basis points typical for the lowest-cost borrow stocks but indicative of greater supply and diminished concerns about borrow availability.
Short-borrow dynamics
Short sellers typically borrow shares to sell them in the market with the goal of repurchasing at a lower price later and pocketing the difference. When a stock’s available supply is limited - a common situation for recently listed names with small floats - borrowing becomes more expensive as demand outstrips availability. S3 Partners’ analysis, however, points to easing constraints for SpaceX, with borrowing costs moderating as lenders make more stock available.
Valuation, investor appetite and deterrents
The high valuation attached to the rockets-and-AI company has made it an attractive target for short sellers looking to wager on a price decline. At the same time, S3 Partners notes a couple of factors that may dissuade some bears: continued strong retail and institutional interest in the shares, and the company’s CEO’s well-known tendency to engage publicly with short sellers. These elements, the firm says, can act as counterweights to shorting pressure.
Price action
On Tuesday, SpaceX shares were trading about 6% higher at $164.04, having fallen earlier in the session to as low as $147.11. The intraday movement highlights ongoing volatility even as borrowing conditions shift.
Context from S3 Partners
Sam Pierson characterized the roughly 60 basis point borrow rate as higher than the lowest-cost group - around 30 basis points - but reflective of an environment where lenders are supplying more stock and funds are less worried about running short on borrow availability. That assessment signals changing microstructure conditions around the name without suggesting any particular market outcome.
Conclusion
S3 Partners’ estimate that 5% to 7% of SpaceX’s float is shorted - about 40 million shares - and the reported decline in borrow pressure paint a picture of a market where shorting is feasible at moderate cost, even as investor enthusiasm and company-level dynamics continue to shape interest on both sides of the trade.