Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.

What Happened

Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.” SpaceX (NASDAQ: SPCX) went public on June 12, 2026, at $135 per share, quickly surging to an all-time high of $225.64 days later and briefly implying a valuation exceeding $2 trillion before retreating sharply.

By early August, shares traded near $108–$125, roughly 50 percent below the peak, bringing market capitalization closer to $1.5–1.7 trillion. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.

Short interest has climbed dramatically, with S3 Partners data showing short positions reaching approximately 219.3 million shares by late July — about 34 percent of the limited public float of roughly 640 million shares — representing a notional value near $24.6 billion. Utilization of borrowable shares hit 95 percent and borrow fees rose, with the dollar value of shorts exceeding Tesla’s at its peak. The positioning built ahead of two catalysts: SpaceX’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.

CEO Elon Musk has issued his own warnings. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low.” On August 4, just before earnings, he responded to the latest data by saying, “I try to warn them, but they just double down.”

SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion. The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink and connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.

Why It Matters

The combination of Palihapitiya’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.

The Bottom Line

The battle over SpaceX’s public valuation is now playing out in real time, with record short interest meeting a first earnings beat. Whether the lockup triggers further downside or bulls are proven right will depend on execution against aggressive growth projections.