Short sellers targeting SpaceX are increasing rapidly. With the stock falling nearly 30 percent in a short period, the share of short selling jumped to 13 percent from 8 percent in a day. That suggests market focus is shifting from long-term growth to short-term cost burdens.

Cryptopolitan, a blockchain media outlet, reported on June 24 local time that SpaceX shares fell about 30 percent within just a few days after hitting an early-session high on June 12.

The stock, which briefly rose to $225.64 shortly after listing, has seen about $600 billion in market value evaporate over the past 3 sessions. If the weakness continues, market value could fall to about $1.95 trillion, raising the possibility it drops below $2 trillion for the first time since listing.

Broader investor sentiment has also deteriorated. The Nasdaq 100 was expected to see more than $1 trillion in market value wiped out the same day, weighed down by declines in major big tech and semiconductor stocks. SpaceX, however, drew attention for a much faster rise in short selling than other large tech stocks.

Market data firm Ortex Technologies tallied SpaceX short interest jumping to 13 percent from 8 percent in the previous session. It briefly surged to 14 percent early in the session. Ortex co-founder Peter Hillerberg said, "Such a rapid increase in short interest is a clear signal that more investors are betting on further declines."

Another data firm, S3 Partners, also pointed to a similar trend. About 40 million shares are currently in short positions, it estimated, equivalent to roughly 5 to 7 percent of the free float.

Improved conditions for share lending are cited as a reason for the rise in short selling. Sam Pearson, head of research at S3 Partners, said, "Access to shares for shorting is improving compared with before." Annual share-borrowing costs paid by short sellers are currently about 0.60 percent, an analysis said, lowering the barrier to opening short positions because shares can be borrowed at relatively low cost.

Ortex also calculated borrowing costs at about 1 percent. It put the utilisation rate, the share of lendable stock actually borrowed, at about 39 percent, and assessed there was still ample capacity for more short selling. The figures stand out more compared with other large tech stocks. Short interest for the so-called "Magnificent 7" — Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla — mostly remains around 1 to 3 percent, and borrowing costs are said to be about 0.25 to 0.33 percent.

In derivatives markets, investors are also weighing the likelihood of declines more heavily. The options market is pricing about a 40 percent chance SpaceX falls below $130 by mid-September. In particular, for options expiring between July and September, put open interest that profits from declines was almost double call open interest. Steve Sosnick, chief strategist at Interactive Brokers, said, "Options trading is moving in a much more balanced direction than before."

There are also factors that could weigh on short sellers. Elon Musk has long publicly criticised short selling, and if large-scale buying from institutions and individual investors flows back in, short sellers could face losses.

The recent surge in short selling shows market views of SpaceX are changing. Investors are beginning to place greater importance on immediate large-scale investment and cost burdens than on the long-term growth vision presented by Musk. As a result, the market is also showing signs of revaluing SpaceX closer to an industrial company requiring massive capital investment rather than a high-growth software company.

The stock's next direction is expected to be determined by whether growth expectations revive or concerns about cost burdens continue to expand.