Intuitive Machines Stock Soars as Lunar Mission Makes Progress
Intuitive Machines, a space start-up, has experienced a significant surge in its stock price in recent days. While the company’s strong fundamentals have played a role, the gains can also be attributed to other factors. Particularly, the short interest in Intuitive’s stock has been climbing. Prior to the launch, the company’s shares were up 100% year-to-date, reaching $5 from around $2.50. This, combined with a successful mission, potentially explains the remarkable performance of Intuitive’s shares over the past week.
Intuitive Machines saw another 13% increase in its stock price in early trading, reaching $12.46 per share, while the S&P 500 and Nasdaq Composite experienced slight declines. This gain follows a 50% surge on Tuesday, with the stock up nearly 200% month-to-date.
The recent surge in Intuitive’s stock price can be traced back to its lunar lander, Odysseus, which was launched onboard a SpaceX rocket on February 15. As of Tuesday, the lander was approximately 68,000 miles away from the moon and is set to enter orbit on Wednesday, with a landing scheduled for Thursday. This technical accomplishment has been widely anticipated by investors. As a result, the gains in Intuitive’s stock price are now approaching $1 billion.
Short interest in Intuitive’s stock has reached 13.6% of its shares available for trading, according to S3 Partners. This level of short interest is considerably higher than the average for stocks in the S&P 500, which typically stands around 2%. Moreover, short interest in Intuitive has been steadily increasing. At the beginning of the year, short interest was negligible, indicating a growing bearish sentiment among investors.
With the high short interest, short sellers are finding it challenging to build their positions further due to a shortage of available shares and high borrowing fees. The borrowing fee for Intuitive’s stock is currently around 35% annually, compared to an average fee of 0.6%. This high borrowing cost indicates an excessive level of shorting and suggests that short sellers may be inadvertently working against their own interests. A risk associated with high short-interest stocks is a squeeze, where a rush to buy back shorted shares causes a sudden surge in their price.
Looking ahead, the outcome for Intuitive’s stock remains uncertain. However, the true highlight will be the success of the company’s lunar landing. Achieving this milestone would be an impressive feat for a small start-up in the space industry.
Analyst comment
Positive news: Intuitive Machines stock soars as lunar mission makes progress
As an analyst, the market for Intuitive Machines is likely to continue its positive trajectory in the short term, driven by the successful progress of its lunar mission. The surge in stock price and high short interest indicate growing investor enthusiasm. However, the high borrowing fees and potential squeeze risk pose uncertainties for the stock’s future performance.
