SpaceX has become a prime target for short sellers weeks after its record-breaking IPO, with investors betting its $2.1 trillion valuation could falter. The stock briefly dipped below its $135 IPO price, marking the first time since its Nasdaq listing, and has fallen approximately 10% recently. Short interest has surged to 181 million shares, representing 28% of the tradable float, the highest for a new company in its first month. Unrealized gains for short sellers are around $3.88 billion.

Analysts attribute the bearish sentiment to recent stock weakness, approaching insider lockup expirations, and a high valuation (49 times expected revenue, compared to Tesla's 15). Concerns also stem from SpaceX's recent $25 billion bond issuance for AI infrastructure, adding to broader fears of aggressive capital spending impacting future returns amid elevated interest rates.

Key catalysts for potential volatility include the upcoming 13th Starship test flight and second-quarter earnings. The expiration of insider lockup restrictions could also introduce millions of additional shares to the market, increasing selling pressure. Despite this, a majority of analysts still recommend buying the stock, though some high-profile investors predict a significant price crash.