Missed Nvidia in 2009? This Rare Signal Is Flashing Again.\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/a> <\/p>\n The market took its time coming around. Shares rose about 3% on Tuesday to close at $123.46, snapping a seven-session losing streak. <\/p>\n So are the short sellers really trapped? Or is a one-day bounce in a stock trading about 45% below its post-IPO high just short-term covering? <\/p>\n The short position didn’t build slowly. S3 said short sellers have been adding exposure ahead of several key catalysts, including the company’s first earnings report as a public company and the lock-up expirations that follow it. <\/p>\n That report now has a date. SpaceX has confirmed it will release its first quarterly results after the market closes on Aug. 4. Lock-up restrictions begin expiring shortly after, which could put a wave of insider shares on the market for the first time since the company’s June initial public offering (IPO)<\/a>. <\/p>\n The stock’s slide explains the bears’ confidence. SpaceX went public at $135 per share, briefly traded as high as $225.64, and closed Monday at $119.85, a new low. <\/p>\n And the fundamentals give skeptics something to work with. The company generated about $19 billion of revenue over the trailing 12 months, up 33% year over year. That’s impressive growth, but it’s attached to a market capitalization of about $1.6 trillion. The stock trades at more than 80 times sales, and the business is still losing billions of dollars a year. <\/p>\n The debate was never about whether SpaceX is impressive. A company growing 33% at this scale clearly is. The debate is how much of that future a $1.6 trillion market value already prices in. <\/p>\n What would actually force a squeeze <\/p>\n A short squeeze needs more than a big short position. It needs shorts who are forced to buy back shares (because borrowing costs spike, losses pile up, or a catalyst destroys the downside case), and a thin supply of shares available for buying makes the scramble worse. <\/p>\n Story Continues <\/p>\n Some of those mechanics are arguably present here. A third of the tradable float sold short is an extremely crowded bet. And the Aug. 4 report could force a scramble to buy back shares if results impress. <\/p>\n However, one mechanical detail works in the shorts’ favor: The float is about to grow. SpaceX’s publicly tradable float is only around 640 million shares, or roughly 5% of the more than 13 billion shares outstanding. As lock-ups expire in the months after the earnings report, that float should expand dramatically. <\/p>\n More supply makes shares easier to borrow and easier to buy back. That’s the opposite of a trap tightening. <\/p>\n So Musk may be right that betting against SpaceX is dangerous over time. But the shorts aren’t cornered the way the 32% figure makes it look. <\/p>\n Whatever the case, investors choosing to short the stock should be cautious. A squeeze could send shares sharply higher in the near term. With this much of the float sold short, rallies in a heavily shorted growth stock can feed on themselves. <\/p>\n But a squeeze is a trade, not an investment thesis. Nothing about Tuesday changed what the company earns or what it spends. <\/p>\n For me, the more useful event is two weeks away. The Aug. 4 report will give investors their first real look at SpaceX’s financials as a public company. In the meantime, I’m not betting with the shorts against a company growing 33% a year and with a massive long-term runway. But with the stock’s valuation at more than 80 times sales, I’m also not betting with Musk yet, either. I’ll wait for the Aug. 4 numbers. <\/p>\n Should you buy stock in Space Exploration Technologies right now? <\/p>\n Before you buy stock in Space Exploration Technologies, consider this: <\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the\u00a010 best stocks<\/a> for investors to buy now\u2026 and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. <\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $364,562!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,247,668!* <\/p>\n Now, it’s worth noting\u00a0Stock Advisor’s total average return is 894% \u2014 a market-crushing outperformance compared to 207% for the S&P 500.\u00a0Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built by individual investors for individual investors. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of July 21, 2026. <\/p>\n Daniel Sparks<\/a> and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Image source: Getty Images. The bet against SpaceX got crowded fast <\/p>\n