The recent decline in SpaceX's stock price, which has shed over a quarter of its value in just over a week, has not significantly increased short selling activity. Despite the sharp pullback from its post-IPO record high, bearish bets remain relatively modest, with only about 40 million shares sold short, representing roughly 5% to 7% of the company's publicly tradable float. This is a relatively small percentage compared to other companies in the S&P 500, where over 60 companies have short interest exceeding 7% of their float. The low borrowing costs and ample liquidity in the securities lending market, with over 30 million shares available to borrow at annualized fees below 1%, suggest that the lack of short selling activity is not due to supply constraints. Instead, many traders appear to be hesitant to bet against a company with a passionate retail investor base and a reputation for innovation. Even seasoned skeptics, such as Michael Burry, have opted not to short SpaceX's stock, highlighting the challenges of predicting the company's future performance. As a result, the current market dynamics suggest a normal price discovery process rather than a short-squeeze scenario, with traders taking a wait-and-see approach as the stock continues to fluctuate.

Source: CNBC