Musk's Momentum Deters Short Sellers Despite SpaceX's Sharp Decline

SpaceX's recent stock slump has failed to attract a significant number of short sellers, with many investors still wary of betting against CEO Elon Musk. Despite shedding over a quarter of its value in just over a week, the company's shares have only drawn modest bearish interest. According to estimates by S3 Partners, approximately 40 million SpaceX shares are currently sold short, representing a relatively small 5-7% of the company's publicly tradable float. This cautious approach is likely due to Musk's reputation as a visionary leader and the passionate retail investor base that has driven SpaceX's growth story.

Even seasoned skeptics, such as Michael Burry, have opted not to short the stock, suggesting that many investors remain bullish on the company's long-term prospects. With ample liquidity in the securities lending market and low borrowing costs, the stage is set for a potential rebound. As Matthew Unterman, head of research at S3, notes, the current market conditions do not indicate a classic short-squeeze scenario, but rather a normal price discovery process. For now, it seems that Musk's momentum continues to deter short sellers, despite the recent decline in SpaceX's stock price.

Source: CNBC