SpaceX has canceled a major test flight mission for its Starship rocket. This marks the company's first Starship test since its IPO in June and coincides with a sensitive period where its stock price is under pressure and short interest has reached a rare high for a newly public company.
At 5:45 PM local time on July 16, Starship was originally scheduled to conduct its 13th major mission from the "Starbase" launch facility in southern Texas. However, the test flight plan was forced to be postponed as multiple engines failed to ignite, triggering an automatic abort sequence.
Musk later posted on the X platform:
Several engines did not start, triggering the automatic abort. We are currently offloading propellant and hope to make another launch attempt within a few days.
Dan Huot, SpaceX's external communications manager, stated:
We will work with the team to thoroughly investigate what happened and determine the timing for our next attempt.
Following the announcement, SpaceX's stock price fell more than 3% in after-hours trading.
Since its intraday high on June 16, the stock has fallen by approximately one-third, erasing about $860 billion in market capitalization. Meanwhile, according to data from S3 Partners, short sellers' paper profits have climbed to $3.88 billion.
Stock Under Sustained Pressure, Short Interest Hits New High
The test flight abort has further intensified the recent downward trend in SpaceX's stock price.
SpaceX declined for the fifth consecutive trading session. Since its post-listing peak, the cumulative drop is about one-third, wiping over $860 billion from its market value.
Short selling activity has expanded simultaneously. According to Ortex Technologies, since SpaceX went public, short sellers have accumulated approximately $8.7 billion in unrealized profits. Data from S3 Partners shows paper profits have risen to $3.88 billion.
Currently, about 181 million shares, representing 28% of the float, have been sold short. This ratio is among the highest historically for a newly public company within its first month of listing. In the past week alone, new short sales amounted to roughly 37 million shares, involving a market value of about $5 billion.
Ihor Dusaniwsky of S3 Partners commented:
The recent stock weakness has both stimulated short selling and reflects the market positioning ahead of the upcoming lockup expiration.
Beyond the test flight outcome, another current market focus is SpaceX's upcoming first quarterly earnings report.
After the earnings release, some early shareholders will become eligible to sell for the first time, opening a window over the following weeks where a large number of shares will be unlocked from lockup periods. The potential increase in supply has kept the market cautious about short-term stock price movements.
A 28% short interest ratio indicates that institutional investors widely anticipate the stock will remain under pressure in the near term. The timing of the two major catalysts—the test flight results and the earnings report—closely aligning has made the positioning battle between bulls and bears even more complex.
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