SPCX heads into the back half of August with short sellers continuing to retreat and the lending market largely normalised — yet options traders remain the most defensively positioned they have ever been on this stock.
The cover wave is still grinding lower. Short interest fell another 5.3% on Tuesday to 118.1 million shares, extending a sequence that has now erased 49% of the August 6 peak of 232.7 million. The week-on-week decline is 34.4%. Since the previous note identified a stall at 126.4 million shares on August 14, that floor has broken — bears are still covering, not holding. The remaining position, however, is far from trivial. Even at 118 million shares, the build since early July represents a structurally elevated base for a stock that listed with under 24 million shares short. The cover trade is progressing, but it is not finished.
The lending market tells a normalisation story that contrasts sharply with where things stood two weeks ago. Availability has climbed to 62.6% — from readings near zero on August 5 and 6, when the borrow pool was essentially exhausted. Cost to borrow has collapsed to 0.64%, down from the August 6 peak of 10.1%. Both metrics confirm the acute squeeze mechanics have passed. Shorts who wanted out have largely got out; the remaining holders are sitting in a market where borrowing is again cheap and plentiful. That removes the mechanical pressure that forced the initial cover wave.
Options traders are drawing a different conclusion. The put/call ratio hit a fresh record high for SPCX on Tuesday at 1.11 — 2.3 standard deviations above the 20-day mean of 0.94. This is the most defensively positioned options market the stock has seen since listing in early July, and the move has accelerated over the past two sessions even as the lending picture improved. Shorts cover, borrow loosens, the stock gains 7.5% on the week — and yet demand for downside protection is rising, not falling. That divergence between the short book and the options book is the sharpest signal in the current setup.
The analyst community has been broadly constructive through the volatility. Most active coverage holds Buy or Outperform ratings, with price targets ranging from $160 (Argus Research, which upgraded from Hold on August 7) to $250 (Macquarie and Needham). Wells Fargo trimmed its target from $230 to $215 on August 5 while keeping Overweight, and Piper Sandler lowered to $140 — the sole Neutral on the panel. The consensus target of $213.50 implies roughly 49% upside from Tuesday's close of $143.34. The ORTEX short score has eased to 65.96 from its recent high above 71, consistent with the cover trend, though it remains elevated enough to flag that bears have not fully cleared the position.
Elon Musk's 46% controlling stake anchors the ownership picture, with Alphabet holding 4.2% and Fidelity reporting a meaningful June 30 addition that brought its stake to 2.3%. The next earnings event is slated for November 5 — the prior print in early August produced an 8.3% single-day decline before a 16.6% five-day recovery, a pattern worth holding in mind as that date approaches.
What to watch: whether the put/call ratio begins to mean-revert toward its 0.94 average — or extends further into record territory — will signal whether options traders are ultimately following the short-cover narrative or bracing for a second act.
See the live data behind this article on ORTEX.
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