Virgin Galactic short sellers lose $64 million as shares surge over 200% since May 20

Short sellers betting against Virgin Galactic (SPCE) have suffered $64 million in year-to-date mark-to-market losses as the stock surged more than 200% since May 20, 2026, according to financial analytics firm S3 Partners. The rally accelerated following the company's reaffirmed plan to resume commercial spaceflight launches in the fourth quarter and the completion of its first flight test in nearly two years, reigniting investor enthusiasm for space tourism. S3 Partners founder Bob Sloan attributed the sharp gains in part to a short squeeze. Short interest in Virgin Galactic totals $118 million, dwarfing the combined $103.3 million held by active and passive long funds. This imbalance has forced short sellers to buy back shares to cover positions, further fueling the upward price momentum. Retail investor inflows into space-related stocks, driven by anticipation of a potential SpaceX IPO, have amplified the effect. Sloan noted that the large outstanding short position could sustain additional short-covering rallies if the stock maintains its strength.