$SPCX price has probed up to $123 already.

Short sellers are making about $8.7 billion in profit as SpaceX falls back to its IPO price of $135. Short interest has surged from 5-7% to 29% of the float in just 3 weeks, an unusual increase according to analysts.

But the notable point is not that SpaceX is dropping in price. It's that the market structure is creating volatility itself: only about 5% of the 13 billion SpaceX shares are allowed to trade freely. When nearly one-third of that float is shorted simultaneously, every bad news like Starship launch delays or upcoming lockup releases not only reflects the company's value but is also amplified by the excessive short pressure.

The real question is not whether SpaceX is worth a $1.78 trillion valuation. It's who will be squeezed first when the lockup expires and hundreds of millions of new shares flood this thinly liquid market — the buyers or the short sellers.

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