The 13th test flight of SpaceX's Starship was aborted on July 16 due to multiple engines failing to ignite. Elon Musk stated a new attempt would be made within days, with the most likely launch window being early next week. To ensure a successful flight, two Raptor engines will be replaced. Following the announcement, SpaceX's stock fell more than 4% in after-hours trading, having declined approximately one-third from its June peak, erasing over $860 billion in market capitalization.
SpaceX canceled a major test flight of its Starship rocket, marking the company's first Starship test since its June IPO. This comes during a sensitive period as the stock faces pressure and short interest has reached a notably high level for a newly public company.
At 5:45 PM local time on July 16, Starship was scheduled to conduct its 13th major mission from the "Starbase" launch facility in southern Texas. However, the test flight was postponed after an automatic abort was triggered due to multiple engines failing to ignite.
Musk posted on X:
Several engines did not start, triggering an automatic abort. We are currently offloading propellant and hope to attempt another launch within days.
Musk later added:
The most likely launch time is early next week. To ensure a smooth flight, we will replace two Raptor engines.
SpaceX Public Relations Manager Dan Huot stated:
We will work with the team to investigate thoroughly, understand what happened, and determine the timing for the next attempt.
Following the news, SpaceX shares fell more than 4% in after-hours trading, after having closed down 3% in the regular session.
Since its intraday high on June 16, the stock has declined by approximately one-third, wiping out $860 billion in market value. Concurrently, data from S3 Partners shows that short sellers' paper profits have risen to $3.88 billion.
Stock Under Continued Pressure, Short Interest Hits Record High
The test flight abort has intensified the recent downward pressure on SpaceX's stock price.
SpaceX fell for the fifth consecutive trading day. Since its post-IPO peak, the stock has dropped about one-third, erasing over $860 billion in market capitalization.
Short selling activity has expanded in tandem. As noted by Wall Street News, data from Ortex Technologies indicates that short sellers have accumulated approximately $8.7 billion in unrealized profits since SpaceX went public. S3 Partners data shows paper profits have climbed to $3.88 billion.
Currently, about 181 million shares, representing 28% of the float, have been sold short—a proportion that ranks among historically high levels for a newly public company within its first month. In the past week alone, approximately 37 million new shares were shorted, involving a market value of about $5 billion.
Ihor Dusaniwsky of S3 Partners commented:
The recent stock weakness has both stimulated shorting activity and reflects market positioning ahead of the upcoming lock-up expiration.
Beyond the test flight outcome, another current market focus is SpaceX's upcoming first quarterly earnings report.
Following the earnings release, some early shareholders will become eligible to sell for the first time, initiating a window over the coming weeks where a significant number of shares will be unlocked. This potential supply increase has kept the market cautious about the stock's near-term trajectory.
A 28% short interest indicates that institutional investors widely anticipate continued near-term pressure on the stock price. The close timing of the test flight results and the earnings report, two major catalysts, has added complexity to the positioning battle between bulls and bears.
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