SPCX enters the back half of August with its short cover trade losing steam — and options traders refusing to stand down.
The covering story has been the dominant narrative for five sessions. Short interest peaked at 232.7 million shares on August 6. It has since retreated to 165.6 million — a 29% reduction — and the week-on-week decline now reads 22.5%. That is real progress. But the pace is decelerating. The drop from Monday's 180.1 million to Tuesday's 165.6 million is smaller than the single-session moves that preceded it, and the remaining short base — still 25.9% of free float — is a structurally elevated position for a stock that listed in early July at 3.7% SI. Bears have covered roughly a third of the peak build. Two-thirds remains.
The borrow market is reopening, but it is not yet relaxed. Availability has climbed to 10.1%, a dramatic reversal from the near-zero readings that persisted through most of last week — on August 5, availability touched 0.07%, the tightest level in SPCX's short history. Cost to borrow collapsed from its August 6 peak of 10.1% to 1.17% now, an 82% drop in a week. Both moves confirm that the most acute squeeze mechanics have passed. Yet 10% availability still means the lending pool is far from comfortable — for every ten shares available, roughly one hundred are already lent out. The ORTEX short score has eased from its 71.3 peak to 67.9, tracking the partial unwind, but remains well into elevated territory.
Options positioning is the clearest signal that caution has not lifted. The put/call ratio is running at 1.04, near its 52-week high of 1.06 and about 1.6 standard deviations above its 20-day average of 0.93. That is the most defensively tilted the options market has been since SPCX listed — a pattern that was flagged in the August 12 report and has not resolved. Notably, the PCR moved higher on Monday and Tuesday even as short interest was falling. Options traders are hedging into the recovery, not celebrating it.
Analyst reaction to the recent earnings prints has been mixed in direction but consistent on one point: the stock remains a buy for most of the Street. Argus Research upgraded to Buy on August 7, setting a $160 target — above the current $133.29 close. Macquarie, Cantor Fitzgerald, and Needham all held their Outperform or Buy ratings with targets in the $246–$250 range. Wells Fargo trimmed its target from $230 to $215 while keeping Overweight, and Piper Sandler cut from $156 to $140 on a Neutral rating — the only one below the current price that is internally consistent. The consensus mean target of $225.69 implies roughly 69% upside from here, though HSBC's $115 Hold initiated last month sits as the outlier bear. The PE multiple has compressed sharply — down more than 148 points over 30 days to 104x — reflecting how quickly estimates have been revised upward relative to the still-elevated price. The EV/EBITDA of 84x has similarly contracted 41 points in a month.
Institutional ownership tells a straightforward story: Elon Musk controls 46% of shares, Alphabet holds 4.2%, and FMR (Fidelity) recently added 52 million shares to reach 161 million — a meaningful accumulation. The Norway sovereign wealth fund purchase flagged in Tuesday's report adds a further institutional endorsement at current prices. These are not sellers.
The earnings pattern is worth noting. The most recent print on August 4 produced a 5.5% drop the next day, then a 16.4% five-day recovery. The August 5 event showed a similar intraday reaction of -8.3%. The next event is not until November 5 — so earnings are not the immediate catalyst to monitor.
What to watch now is whether the covering pace stabilises at current levels or resumes with fresh urgency. The borrow market reopening gives new shorts the mechanical ability to re-enter, which could slow or reverse the unwind. The put/call ratio near its 52-week high, persisting even as shorts cover, suggests options traders are still pricing in downside risk that the covering flow alone has not resolved.
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