Orbit Alpha Issue 14 · 19 Jul 2026

Below the IPO price. Below the floor. Below everything.

MARKET OVERVIEW
🌎 Below the IPO price. Below the floor. Below everything.

Track every space stock live at Orbit Alpha

SpaceX broke below its $135 IPO price this week, then Starship Flight 13 scrubbed on the pad. The stock kept falling, closing Friday at approximately $124, down 45% from its June high and 8% below the price retail investors paid on day one. The name that was supposed to anchor the sector is now dragging it through the floor.

The damage was not contained. ASTS priced a $1 billion convertible note offering and fell 25% on the week. RKLB dropped 10% on Thursday alone after Piper Sandler initiated at Neutral, falling to $67.20 and breaching the lower collar on the $8 billion Iridium deal for the first time. The Procure Space ETF (UFO) is down 14% in a month. Goldman Sachs data published this week showed the US space and satellite sector is five times as volatile as the S&P 500 and twice as volatile as an equivalent AI basket, and unlike AI, the space basket is now trading below where it started the quarter. June's CPI came in at 3.5%, down from May's 4.2%, which briefly lifted growth names on Tuesday, but the sector sold through the macro tailwind within 48 hours.

One operational milestone broke the pattern: Rocket Lab completed a full-duration hot fire of Neutron's vacuum-optimised AVac engine on 13 July, just under 5.5 minutes at NASA Stennis, the most significant propulsion test yet for the vehicle that underwrites the Iridium acquisition's long-term economics. The market barely noticed. It was too busy selling.

SPACEX (SPCX)

This was the week the IPO price broke. SPCX closed at $138 on Monday, already within touching distance of $135, then slipped below it on Wednesday for the first time. The Starship Flight 13 scrub on Thursday evening made it worse. SpaceX opened a 90-minute launch window at 6:45 p.m. ET on 16 July and stood down within minutes after Raptor engines failed to ignite, triggering an automatic abort. Musk wrote on X that two Raptors would need to be removed and replaced, targeting a retry "early next week." The stock fell 3% in extended trading to $131.11 and continued sliding, hitting a new all-time low of $130.74 before closing Friday at approximately $124, a 45% decline from the $225.64 peak and 8% below the IPO price.

Flight 13 was supposed to be Starship's first revenue-generating mission, deploying 20 next-generation Starlink V3 satellites, including six equipped with cameras to monitor the heat shield during re-entry. A successful flight would have validated the vehicle's path toward commercial service. Instead, the scrub reinforced execution concerns following booster control and engine reignition issues on Flight 12. Piper Sandler initiated coverage at Neutral on 16 July, and JPMorgan's Seth Seifman remained cautious, flagging second-stage refurbishment cost and turnaround time as unresolved questions. Short sellers have earned $8.7 billion on the SPCX decline. Cathie Wood's ARK funds were reported buying the dip. The next catalyst remains the 6 August earnings report and first lockup release, now arriving into a stock trading below its offering price.

ROCKET LAB (RKLB)

The stock and the hardware went in opposite directions. RKLB fell 10% on Thursday after Piper Sandler initiated at Neutral with an $83 target, arguing that valuation remains stretched and execution risk on Neutron and the Iridium integration justifies caution. The stock hit $67.20 intraday, breaching the $67.50 lower collar on the Iridium acquisition for the first time. Below that threshold, the deal mechanics shift: Iridium holders receive a fixed 0.4 RKLB shares plus $27 cash per share, meaning every dollar RKLB falls below $67.50 directly reduces the stock component of the consideration. The deal spread stood at 14.4% at midday Thursday. RKLB is now down 36% over the past month and has slipped below its 200-day simple moving average for the first time since early 2025.

The hardware told a different story. On 13 July, Rocket Lab completed a full-duration hot fire of Neutron's vacuum-optimised AVac engine at NASA's Stennis Space Center in Mississippi. The burn lasted just under 5.5 minutes, simulating flight-like requirements for the upper-stage engine that produces approximately 1.2 times the thrust of the first-stage Archimedes. Rocket Lab called it "critical preparation for Neutron's first flight," which the company is targeting for late 2026. For anyone watching the Iridium timeline and the cost-synergy case, this test, not the Piper initiation, is the data point that matters.

AST SPACEMOBILE (ASTS)

ASTS priced a $1 billion private offering of 1.625% convertible senior notes due 2034 on 16 July, with an initial conversion price of $79.57 per share and expected net proceeds of approximately $983.6 million. The capital raise is strategically rational, it funds satellite manufacturing and deployment ahead of the ~45-satellite continuous-coverage threshold, but the timing collided with the worst day of sector sentiment in weeks. The stock fell over 15% on Thursday alone and roughly 25% on the week, dropping to levels not seen since December. Piper Sandler's initiation on the same day offered a counterweight: analyst Alexander Potter assigned an Overweight rating with a $100 price target, calling ASTS his preferred name in the sector on "more palatable valuation" and a clearer earnings-expansion path than either SPCX or RKLB. BlueBirds 11, 12 and 13 remain on track for a first-half-August launch, and the ~$926 million Japan subsidy is still funded. The convertible gives ASTS roughly $1 billion of additional runway at a 1.625% coupon, the implied conversion price of $79.57 is well above where the stock ended the week.

INTUITIVE MACHINES (LUNR)

Insider selling continued to weigh. Director and 10% owner Kamal Ghaffarian sold approximately $1.74 million in shares on 13 July via a pre-planned 10b5-1 trading arrangement. Stifel maintained its Hold rating with a $32 target on 15 July. LUNR is trading around $13.74, roughly 70% below the $40.78 consensus target, with the $1.1 billion backlog and $148.3 million NASA CLPS award from late June still underpinning the bull case. Earnings are scheduled for 18 August.

SPIRE GLOBAL (SPIR)

Spire appointed Eric "Mell" Mellinger as Chief Commercial Officer on 17 July, a growth-executive hire tasked with leading global commercial strategy and accelerating revenue expansion across government and commercial markets. The appointment signals management's focus on converting Spire's space-based data platform into faster top-line growth.

Takeaway: This was the week the space correction stopped being orderly and became violent. SPCX is now below its IPO price. ASTS raised a billion dollars and lost a quarter of its market cap in the same session. RKLB breached the lower collar on its own acquisition. Starship's first revenue-generating mission was scrubbed on the pad. The sector that was up 360% over the prior twelve months, per Goldman's own basket data, is now giving it back at speed. But beneath the tape, the operational evidence has not broken: Neutron's upper-stage engine passed its most important test, ASTS's convertible secures nearly $1 billion of deployment capital at a 1.6% coupon, and Piper Sandler's inaugural "Final Frontier" note brought the first major-bank sector initiation to the space sector, choosing ASTS as the preferred name. What has broken is the scarcity premium that carried everything higher regardless of fundamentals. That premium is not coming back. What replaces it will be determined by whether Starship flies successfully on the retry, the 6 August earnings, and the August lockup releases. Until then, the sector is in the hands of the sellers.

BROKER PULSE
🚀 Consensus prices

Live prices for all names below at Orbit Alpha Markets

SPACEX (SPCX) · Avg target $240.04

ROCKET LAB (RKLB) · Avg target $114.33

AST SPACEMOBILE (ASTS) · Avg target $83.32

PLANET LABS (PL) · Avg target $40.10

INTUITIVE MACHINES (LUNR) · Avg target $40.78

GLOBALSTAR (GSAT) · Avg target $90.00

FIREFLY AEROSPACE (FLY) · Avg target $48.11

MDA SPACE (MDA) · Avg target $44.20

REDWIRE (RDW) · Avg target $14.88

VIASAT (VSAT) · Avg target $94.56

BLACKSKY TECHNOLOGY (BKSY) · Avg target $40.50

VIRGIN GALACTIC (SPCE) · Avg target $3.52

SPIRE GLOBAL (SPIR) · Avg target $20.88

LAUNCH WATCH
🔭 Launches that could move your portfolio

Full launch calendar with live status at Orbit Alpha Launches

Jul 20 · SpaceX — Starship Flight 13 · Starship · Starbase, Boca Chica, Texas. Retry after 16 July scrub (Raptor ignition failure). Ship 40 and Booster 20; two Raptors removed and replaced. First attempt to deploy 20 next-generation Starlink V3 satellites — Starship's first revenue-generating mission if successful.

Jul 21 · SpaceX — MRV-1 · Falcon 9 · SLC-40, Cape Canaveral SFS, Florida. Booster: B1069. SpaceLogistics/Northrop Grumman robotic satellite-servicing spacecraft — DARPA's in-space repair demonstration.

Jul 22 · OrienSpace — Gravity-1 · Sea Launch, Yellow Sea, China. Unconfirmed payload.

Jul 23 · CASC — Unconfirmed vehicle (possibly Long March 3B/E) · LC-2, Xichang Satellite Launch Center, China. Unconfirmed payload.

Jul 24 · CAS Space — Unconfirmed vehicle · LS-43/130, Jiuquan Satellite Launch Center, China. Unconfirmed payload.

Jul 24 · CASC — Unconfirmed vehicle · LC-1, Wenchang Satellite Launch Center, China. Unconfirmed payload.

Jul 24 · SpaceX — Starlink (17-51) · Falcon 9 · SLC-4E, Vandenberg SFB, California. Booster: B1100.

Jul 28 · SpaceX — Starlink (17-52) · Falcon 9 · SLC-4E, Vandenberg SFB, California. Booster: B1081.

Jul (date TBD) · Rocket Lab — "The Grain Goddess Provides" · Electron · Rocket Lab Launch Complex, New Zealand. Eighth Electron mission for Japanese SAR operator iQPS, deploying one synthetic-aperture-radar satellite to a 575 km orbit. Multiple prior scrubs.

Jul (date TBD) · Rocket Lab — LOXSAT-1 · Electron · Rocket Lab Launch Complex, New Zealand.

Jul (date TBD) · Russian Military — Kosmos (GLONASS-K1 No. 19) · Soyuz-2 · Plesetsk Cosmodrome, Russia. Navigation satellite for the Russian GLONASS constellation.

Jul (date TBD) · Roscosmos — Rassvet-3 batch 2 (16 satellites) · Soyuz-2 · LC-43/4, Plesetsk Cosmodrome, Russia. Second batch of 16 Rassvet-3 satellites for Bureau 1440.

Jul (date TBD) · South Korean ADD — Demo Flight · GYUB · Offshore pad, Jeju Island, South Korea.

Jul (date TBD) · CASC — Unconfirmed vehicle (possibly Long March 7A) · LC-201, Wenchang Satellite Launch Center, China. Unconfirmed payload.

Aug 06 · JAXA — Michibiki No. 7 (QZS-7) · H-3 · LA-Y1, Tanegashima Space Center, Japan. Quasi-Zenith Satellite System navigation satellite augmenting GPS coverage in the Asia-Pacific region. H-3 flight no. 9.

SENTIMENT SIGNAL
🎯 THE $25 BILLION SHORT: WHO'S BETTING AGAINST SPACE, WHY THEY'RE WINNING, AND WHAT HAPPENS NEXT

Three weeks ago, roughly 40 million SpaceX shares were sold short, about 5–7% of the publicly tradable float. A normal, healthy level of bearish positioning on a newly public company. Today, that number is 185 million shares. The short interest has ballooned to approximately 29% of the float, representing roughly $25 billion in bearish wagers. Short sellers have earned an estimated $8.7 billion in paper profit since the 12 June IPO. And they are not alone, the bearish positioning extends across the entire space basket, with ASTS and SPCE identified by S3 Partners as the sector's "clearest directional short bets." This deep dive maps who is short, how much they've made, what they're pricing in, and what happens when the trade meets the lockup calendar.

THE NUMBERS: HOW BIG IS THE BET

Start with SpaceX, because the scale is unprecedented. According to S3 Partners, the firm that tracks short-selling data across US equities, approximately 185 million SPCX shares are now sold short, roughly 29% of the publicly tradable float. The total value of those short positions is approximately $25 billion. That figure has surged more than fourfold in three weeks, up from $4.5 billion on 15 June (three days after the IPO). Ortex Technologies, which independently tracks short-selling analytics, estimates that short sellers have accumulated approximately $8.7 billion in paper profit since the IPO, making SPCX one of the most profitable short trades of 2026.

To put the 29% figure in perspective: a stock with short interest above 20% of float is generally considered heavily shorted. Above 25% is extreme. Above 30% enters territory where short squeezes become mechanically possible if a catalyst forces covering. SPCX is sitting at 29%, with $200 million of profit-and-loss generated per dollar of price movement. Every uptick costs the shorts $200 million. Every downtick pays them $200 million. The stock is a two-way weapon at this level of positioning.

The short interest did not build gradually. S3's Matthew Unterman, head of research, described the buildup as "continuous demand from short sellers building speculative positions since the IPO." Ortex co-founder Peter Hillerberg called it "extraordinary for a stock that has been public less than a month." Most stocks take years to attract this kind of bearish crowd. SpaceX did it in five weeks.

IT'S NOT JUST SPACEX

The short trade extends across the basket, but not evenly, and the pattern tells you where Wall Street sees the weakest links.

S3 Partners published a sector-wide analysis identifying ASTS and SPCE as the two "clearest directional short bets" in the space group. ASTS saw a 41% increase in short interest build, with S3 estimating that only about 22% of ASTS short positions are related to convertible-bond arbitrage, meaning roughly 78% is genuine directional conviction that the stock will fall. Given that ASTS just priced a $1 billion convertible offering this week, the convertible-arb component may now increase, but the directional short thesis predates the convert. SPCE saw an even larger short build, up 86%, with short interest at 23.2% of float. These are the two names the institutional short-selling community has identified as most likely to decline further.

LUNR presents a more nuanced picture. It remains heavily shorted, approximately 35 million shares as of the most recent data, but the longs are buying faster than the shorts are selling. Passive ownership (index funds and ETFs) is up 101% year-to-date. Active and hedge fund long positions are up 52% and 97% respectively. S3 described it as "the clearest case: every long cohort grew faster than its +34% short build YTD." In other words, the shorts are betting against a stock where the institutional long side is growing even faster. That is a structurally different setup from ASTS or SPCE.

The contrarian data points are RKLB and VSAT, where short sellers have actually been retreating. RKLB's short interest is down 22% year-to-date, and VSAT's is down 26%. Despite RKLB's 36% decline this month, the short community is not piling in, they are covering. That is a meaningful divergence from the rest of the basket and suggests that the institutional short thesis does not extend to the names with the strongest operational profiles.

WHAT THE SHORTS ARE PRICING IN

Short sellers are not a monolith, but the SPCX short thesis can be decomposed into three overlapping bets:

The lockup trade. This is the mechanical core of the position. The shorts know exactly how much supply is coming and when. The 20–30% institutional unlock after Q2 earnings (6 August), the five 7% employee tranches from late August through late October, and the full 180-day expiration on 8 December will collectively expand the tradeable float by an estimated 800–900%. Economist Peter Schiff flagged this on X, noting that the lockup expirations could "expand the potential tradable float 8X by year-end." For a short seller, this is a supply-driven thesis that does not require the company to fail, it only requires the stock to decline as the scarcity premium dissipates.

The valuation trade. SPCX trades at approximately 112x trailing sales and posted a GAAP net loss of $4.28 billion in the most recent quarter. Even with Starlink generating approximately $11 billion in annualised revenue, the market capitalisation of roughly $1.7 trillion implies that the market is paying a significant premium for Starship optionality, xAI growth, and future revenue that has not yet materialised. Morningstar's fair value estimate of $62 implies the stock is still roughly 100% overvalued at $124. For a fundamental short, the thesis is straightforward: the business is real, but the price is wrong.

The execution trade. The Starship Flight 13 scrub landed at the worst possible moment for sentiment. The shorts are betting that the gap between SpaceX's ambition (orbital AI data centres, 100,000-satellite constellation, Mars colonisation) and its demonstrated execution (two consecutive Starship anomalies, $4.9 billion 2025 net loss, $4.28 billion Q1 2026 loss) will continue to weigh on the stock as the reality of public-company disclosure forces the market to price the business on numbers rather than narrative.

HAVE THE SHORTS BEEN RIGHT? THE HISTORICAL DATA

The post-IPO-to-lockup short trade is one of the most well-documented strategies in institutional equity markets. The academic literature and practitioner research are clear: on average, stocks decline in the period between an IPO and the first major lockup expiration. The mechanism is simple, a supply event (lockup expiry) into a stock that was priced at scarcity levels (thin float) produces downward pressure.

But the average masks significant dispersion. Some of the most profitable companies of the past two decades, including Meta, Amazon, and Google, traded below their IPO price during the lockup window before recovering to multiples of the offering price within two to three years. The question for SPCX is not whether the lockup will create selling pressure (it almost certainly will) but whether the selling pressure is a temporary event that retail investors can position through, or a structural repricing that reflects the stock's fundamental overvaluation.

The historical data on Nasdaq-100 additions offers a partial answer. Over the past decade, 92 stocks added to the Nasdaq-100 returned an average of 18% in the 12 months following inclusion. But that average includes the lockup period. In the first week after inclusion, only six of 21 recent additions saw their stock price rise, meaning the short-term pattern is bearish, while the medium-term pattern is bullish. The shorts are playing the short term. Whether they overstay their welcome into the medium term is the risk they are taking.

THE SQUEEZE RISK: WHAT COULD GO WRONG FOR THE SHORTS

At 29% short interest and $200 million of P&L per dollar of price movement, SPCX is mechanically primed for a short squeeze if a catalyst forces rapid covering. The conditions for a squeeze are specific: a sudden, unexpected positive event (successful Starship launch, blowout Q2 earnings, a major contract announcement) forces short sellers to buy back shares to limit losses, their buying pushes the price higher, which forces more shorts to cover, creating a self-reinforcing upward spiral.

Starship Flight 13's retry, now scheduled for 20 July, is the nearest potential trigger. A successful deployment of 20 Starlink V3 satellites, Starship's first revenue-generating mission, would directly rebut the execution thesis that underpins a significant portion of the short position. It would not address the lockup supply or the valuation concerns, but in a stock with this level of short interest, a single catalyst can produce outsized moves. Cathie Wood's ARK funds have been buying the dip, suggesting at least some institutional capital views the current setup as a squeeze opportunity rather than a fundamental decline.

The 6 August earnings report is the other potential trigger. If SpaceX discloses stronger-than-expected Starlink subscriber growth, xAI revenue from the Google and Anthropic compute deals, or a path to profitability that narrows the gap between narrative and numbers, the shorts could find themselves trapped, covering into a stock where the float is about to expand (giving them shares to buy) but the price is rising (costing them money on every share they return).

WHAT THIS MEANS FOR THE REST OF THE BASKET

The $25 billion short position in SPCX creates a gravitational field for the entire sector. If the short thesis plays out and SPCX continues to decline through the lockup window, every correlated space name, RKLB, ASTS, LUNR, FLY, and the rest, will feel the drag. Goldman Sachs confirmed this week that the space basket is five times as volatile as the S&P 500 and twice as volatile as an equivalent AI basket. The beta is real, and it runs through SPCX.

Conversely, if a squeeze materialises, on a Starship success, a strong earnings print, or simply on the mechanical dynamics of 29% short interest meeting a positive catalyst, the entire basket would rally with it. The same correlation that has dragged everything down would pull everything up.

The names most exposed to the SPCX short dynamics are the ones with the highest short interest of their own (ASTS at ~41% build, SPCE at ~23% of float) and the thinnest floats. The names least exposed are the ones where shorts have been covering (RKLB down 22% YTD, VSAT down 26% YTD) and the ones with fundamental profiles that decouple from the SPCX narrative (MDA with its acquisition-driven recurring revenue, PL with its record backlog and Gen 2 satellite in orbit).

Takeaway: The $25 billion short position in SPCX is not a bet that SpaceX is a bad company. It is a bet that a $1.7 trillion stock with a 5% float, a $4.28 billion quarterly loss, and a five-month lockup expiration calendar starting in three weeks is structurally overvalued at $124, and that the scarcity premium that carried it from $135 to $225 will not survive the arrival of real supply. The shorts have earned $8.7 billion on this thesis so far. The question is whether the trade is early, right, or about to reverse. A successful Starship retry on 20 July or a strong 6 August earnings print could trigger a squeeze in a stock where nearly a third of the float is betting against it. A failed retry or weak earnings would confirm the thesis and potentially accelerate the decline into the lockup window. For holders of any name in this basket, the practical takeaway is the same one we laid out in last week's lockup calendar: the next eight weeks will be defined by these supply-and-demand dynamics, not by the companies' underlying progress. Position accordingly. The $25 billion bet has been placed. The cards start turning on 20 July.

Previous: Issue 13: The index funds bought. Everyone else sold. · Next: Issue 15: Starship flew. The stock didn't care.