Never Bet Against Elon

Maybe it will all collapse, finally.

About 30 per cent of the roughly 640mn SpaceX shares available to trade have been borrowed to sell short, up 10 percentage points over the past 10 days, highlighting how traders are becoming increasingly sceptical of the company’s market prospects.

“Investor enthusiasm for SpaceX seems to have cooled,” said Dec Mullarkey, managing director of SLC Management. The company’s equities and bonds are suddenly “pricing in more risk”, he added.

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About 900mn further SpaceX shares could become available to trade as soon as next month when certain lock-up provisions for pre-IPO investors expire. Traders who doubt there is sufficient demand for the deluge of extra equity are cashing out now as a result, market participants say.

“With more shares coming to market in August, [SpaceX] could announce that they’ve conquered the moon and found gold inside it and there still wouldn’t be enough money out there to buy the stock,” said the chief investment officer of a small North American hedge fund. His firm made $20mn shorting SpaceX earlier in July, he said.