Latest / The Cryptocurrency Economy with Fexingo: Bitcoin, Ethereum, and Digital Money Markets / How SpaceX Short Sellers Are Being Squeezed by Elon Musk
Transcript
- Lucas: So there is a headline from yesterday that I cannot stop thinking about. Goldman Sachs is creating a private markets platform because rich investors are desperate for access to the next SpaceX or Stripe. And almost simultaneously, we learn that bets against SpaceX have grown to 32 percent of the float, and Elon Musk is openly warning short sellers they won't survive. Luna: Wait — 32 percent of the float. In a private company. How does that even work? Short selling a public stock is one thing, but SpaceX isn't listed. Lucas: Right, that's the fascinating part. There are these secondary markets — platforms like Forge Global or EquityZen — where pre ipo shares trade among accredited investors. They facilitate loans of shares, which enables short selling even without a public exchange. The short interest has been building for months, and now Musk is basically daring them to keep it up. Luna: It feels like a game of chicken. He has a history of squeezing shorts — remember Tesla in 2020? But SpaceX is different. The company isn't public, so the mechanics are murkier. Lucas: Exactly. With Tesla, there was a public market, daily price discovery, and options activity. For SpaceX, the price is set by sporadic trades on those secondary platforms. If Musk announces something that boosts perceived value — say a Starship milestone — the shorts can't easily cover because there's limited liquidity. That's how you get a squeeze, but it's slower and more opaque. Luna: And the Goldman piece fits right in. They're building a platform to formalize this market. It's almost like they're creating the infrastructure for more private short selling, more liquidity, more of these battles. Lucas: Goldman's timing is interesting. Jamie Dimon — the JPMorgan CEO — just said markets are underestimating risks and he wouldn't buy stocks or Treasuries at current prices. So on one hand, the biggest banks are building tools for private market access. On the other hand, the most respected bank CEO says be careful. That tension is everywhere right now. Luna: Bitcoin is at 65,875, Ethereum at 1,916. Not exactly screaming risk-on, but not defensive either. It's like the whole market is waiting for something. Lucas: And that's what makes the SpaceX short story a perfect microcosm. You have a visionary founder, a huge information asymmetry, a limited float, and a lot of conviction on both sides. It's a reminder that markets — even private ones — are driven by narrative and liquidity, not just fundamentals. Luna: Speaking of the show, we should mention something. We keep the podcast ad-free because we think the content should speak for itself. If you find value in these conversations and want to support that choice, the link is buy me a coffee dot com slash fexingo. It's a simple way to keep us independent. Lucas: Yeah, it matters. We don't run ads, we don't have sponsors telling us what to cover. That freedom lets us dig into stories like this SpaceX situation without any outside pressure. So if the show adds to your understanding, consider tossing a coffee our way. Luna: Absolutely. Now back to Musk and the shorts — what do you think happens next? Does he actually force a squeeze, or is this just talk? Lucas: I think it's real. He has a track record of following through. Remember the 'funding secured' tweet — that was a mess, but it showed he's willing to provoke. With SpaceX, he controls the information flow. He could announce a new valuation round, a major contract, or even a spin-off like Starlink going public. Any of those would crush the shorts. Luna: But the shorts are sophisticated. They know the risks. They're betting that the valuation is inflated, that Starship is a money pit, or that the Starlink IPO won't materialize soon. It's not a casual bet. Lucas: No, it's not. And 32 percent of the float is huge — that's a concentrated bet. If SpaceX were public, that level of short interest would be a red flag. In a private market, it's even more dangerous because the exit is uncertain. You might be short for years. Luna: Which brings us back to Goldman. They're building a platform that could make this market more efficient, more liquid. But more liquidity also means more short selling. It cuts both ways. Lucas: Exactly. And that's the big picture story. Private markets are growing up. They're getting the infrastructure — the trading platforms, the prime brokerage, the data. But they're still less regulated, less transparent. That creates opportunities and risks. Luna: For the average listener, what's the takeaway? Should they care about a private company short squeeze? Lucas: I think so, because it's a window into how money moves at the top of the wealth pyramid. If Goldman is building a private markets platform, and SpaceX shorts are at 32 percent, it tells you that the action is shifting away from public exchanges. More wealth creation, more drama, more risk is happening in the shadows. Luna: And crypto is part of that shadow, in a way. Decentralized exchanges, tokenized private shares — there's a parallel infrastructure being built on blockchain. Some projects are trying to bring private market liquidity on-chain. Lucas: That's a whole other episode. But yes, the lines between crypto, private markets, and traditional finance are blurring. The SpaceX short story is just one example of a market that's evolving faster than the rules. Luna: Let's keep an eye on it. If SpaceX does squeeze, it will be a case study for years. Lucas: Absolutely. And we'll be here to break it down.