Space Exploration Technologies Corp. (NASDAQ:SPCX) closed Thursday's session at $162.00, gaining 2.83%, as the market heads into a long holiday weekend. U.S. equity and options markets will be closed Friday for Independence Day, with trading resuming Monday. The stock's recent performance sets the stage for a pivotal week ahead, as it is set to join the Nasdaq-100 on July 7.
Nasdaq-100 Inclusion and Passive Flows
According to Reuters, SpaceX's addition to the Nasdaq-100 is expected to generate approximately $4.3 billion in passive inflows, equivalent to about 26.5 million shares based on Thursday's closing price. This represents roughly 4.2% of the free float estimated by Ortex. The move comes just weeks after SpaceX's IPO, which priced at $135 per share, raising $75 billion. The stock currently trades 20% above its IPO price but remains 28.2% below its 52-week high of $225.64.
Short Interest at Record Levels
Short sellers have aggressively targeted SpaceX, with short interest reaching 196 million shares, or about 31% of the free float, according to Ortex data as of Tuesday. This marks a significant increase from 83 million shares the previous week. Ortex co-founder Peter Hillerberg described the jump as "extraordinary" for a stock that has been public for less than a month, calling it "a roller coaster" for shorts. The notional value of these short positions stands at $31.8 billion, dwarfing the expected passive inflows.
Despite the high short interest, the cost to borrow shares remains around 1%, indicating that a classic short squeeze has not yet materialized. However, Hillerberg noted that each $1 swing in SpaceX's share price translates to about $200 million in gains or losses for shorts, suggesting "a lot of potential fuel" if the trade turns into a squeeze.
Valuation and Market Context
The valuation debate continues, with SpaceX shares trading at roughly 107 times forecast 2025 sales, compared to Nvidia's (NASDAQ:NVDA) 21 times sales. Morningstar's chief equity market strategist Michael Field told Reuters that while there is demand for the stock, "We think the stock is overvalued." Meanwhile, S&P Global (NYSE:SPGI) has stated it will not change S&P 500 entry rules for SpaceX and will not consider moving it into major indexes for at least a year.
Elon Musk recently dismissed a Wall Street Journal report claiming SpaceX showed investors an AI handset prototype before its IPO, calling it "Utterly false" on X. Reuters has reported that SpaceX has invested billions into AI hardware, xAI's Grok language model, and computing in space.
Market Implications
The short-term setup is clear: as of Thursday's close, the expected Nasdaq-100 demand is large relative to the free float but still lags behind the massive short interest. When trading resumes on Monday, shorts are positioned against $31.8 billion notional, while passive index funds face a Tuesday deadline to adjust their holdings. This dynamic could lead to significant volatility, especially given the stock's limited float—only about $100 billion of its roughly $2 trillion market value is available for trading, with the rest held by Elon Musk, insiders, and employees.
Investors will be closely watching how the interplay between passive inflows and short interest unfolds, as the outcome could set the tone for SpaceX's near-term price action.
