SpaceX Stock Price Forecast as Short Interest Jumps to 1.8%

SpaceX stock has erased roughly $800 billion in market value since reaching a post-IPO high near $225.64. SPCX briefly fell below its $135 offering price before recovering toward $136 on Thursday. Behind this retreat is the fact that many investors have shorted the stock, expecting it to continue falling.

SpaceX Stock Under Pressure as Short Interest Jumps

One reason why the SPCX stock price has nosedived in the past few weeks is that short-sellers have started to target the company. Benzinga data shows that the company has a short interest of 111.3 million shares. This is equivalent to nearly 2% of the current outstanding shares.

Short interest is a number that looks at the number of outstanding shares that have been sold short but have not been covered. A company with a high short interest means that many shares are held by investors who want to benefit as its stock drops.

There are several potential reasons why investors are shorting SPCX stock. One of them is the fact that many newly listed companies often jump initially and then drop as the hype fades.

A good example of this is Circle Internet, the creator of USDC. Its stock initially surged to $300 after its IPO last year, and then dived to $49 a few months later. Circle has never recovered, and analysts predict that it will continue falling.

The same situation happened with Bullish, a crypto exchange that also owns CoinDesk. Bullish stock initially soared to $117.86 after going public and then slumped to the current $24. A look at most companies that went public last year show that many of them jumped and then crashed after that.

Jitters About SpaceX’s Business Have Continued

Another likely reason why its short interest has continued falling this month is that there are jitters about its business and its key sectors. A look at most companies in its industries have continued falling in the past few weeks.

Space stocks like Planet Labs, Rocket Lab, and Virgin Galactic have all plunged, with the Procure Space ETF (UFO) falling from a high of $68.3 to $43.

Spacex has become a big company in the AI data center industry, inking deals with companies like Anthropic and Google. A look at other companies in the neo-cloud industry, like CoreWeave, Nebius, and IREN, has all plunged in the past few weeks.

SpaceX is also in the AI industry, through its xAI stake. While the AI boom is continuing, many companies in the sector, including popular names like AMD and Palantir have all slipped substantially.

At the same time, there are concerns about its valuation, which has become highly stretched. Despite its retreat, the company is still valued at over $1.8 trillion, a figure that some analysts, especially those from Morningstar, believe is too much.

Additionally, investors are positioning themselves for the upcoming earnings report, which is expected to come out in August this year. In most cases, newly listed companies experience high volatility after releasing their first earnings.

This article is for informational purposes only and does not constitute financial or investment advice. Newly listed stocks can experience sharp volatility, while short-interest and technical indicators do not guarantee future performance. Readers should conduct their own research before making investment decisions.

SpaceX Stock Price Technical Analysis

The hourly chart shows that the SPCX stock has come under pressure as the short interest jumped. It recently crossed the important support level of $147, its lowest level on June 23.

The stock also briefly moved below the psychological level of $135, which was its IPO price. It remains below the 50-period Exponential Moving Average (EMA).

On the positive side, the Relative Strength Index (RSI) has continued rising, moving from 23 to the current 39. Therefore, it may rebound and retest the key resistance level of $147. This will likely be a break-and-retest pattern, which may lead to more downside. Until it moves above that level, it will likely remain under pressure.