Why SpaceX stock is down over 3% on Thursday

SpaceX SPCX shares fell more than 3% on Thursday as investors awaited the company's delayed Starship test flight, a mission widely viewed as a key catalyst for the newly public space and artificial intelligence company.

The stock traded around $111.35 in early trading after tumbling 6.7% on Wednesday, extending a volatile stretch following its record-setting initial public offering.

Broader markets were also weaker, with futures tied to the S&P 500 and Dow Jones Industrial Average down 1.2% and 1.1%, respectively.

Investors look to Starship for a catalyst

Investor attention is centered on SpaceX's 13th Starship test flight, scheduled to lift off from Texas later today.

The launch was originally planned for July 16 but was postponed for a week because of an engine issue.

The mission is expected to be closely watched by investors looking for evidence that the company can continue advancing its launch capabilities as it seeks to justify its premium valuation.

Shares have struggled since their initial surge following the IPO, with valuation concerns weighing on sentiment.

According to the information provided, SpaceX trades at roughly 40 times estimated 2026 sales, a multiple that investors have questioned given the company's size and current financial profile.

Short sellers increase bearish bets

Bearish investors have continued to add to their positions as the stock declined below its IPO price.

According to Reuters, citing Ortex Technologies data through Tuesday, short sellers are sitting on an estimated $15.5 billion in paper profits since SpaceX's mid-June listing.

The stock has fallen below its $135 IPO price after reaching a post-listing high of $225.64 and dropped to a record low of $115.26 on Wednesday.

"There is no sign of short sellers taking profits on SpaceX," Ortex co-founder Peter Hillerberg told Reuters.

"If anything they are leaning in harder," Hillerberg added.

According to Ortex, approximately 360 million SpaceX shares, representing about 56% of the free float, were on loan through Tuesday, indicating sustained bearish positioning.

Chief Executive Elon Musk responded earlier this week with a warning aimed at investors betting against the company.

“Survival probability of firms who maintain significant short position in SPCX over time is very low,” Musk wrote in a post on X.

Analysts remain constructive

Despite the recent share price weakness, Wall Street analysts continue to maintain a largely positive outlook on SpaceX.

According to LSEG data, 27 of the 32 analysts covering the stock recommend buying it, while four have Hold-equivalent ratings and one recommends selling.

Supportive analysts argue that the company's Starlink satellite internet business, government launch operations, and Musk's history of attracting investor interest justify a valuation premium despite SpaceX reporting a net loss of nearly $5 billion last year.

Analysts have also identified Thursday's Starship test flight as a potential catalyst, with investors expected to assess the company's execution in its launch business ahead of its upcoming earnings report and the continued expansion of its public float.