Seems odd that they don't discuss a common reason to short a stock: you expect it to go down, without any real opinion on the business. In this case there is going to be a ton of new float fairly soon. It's a pretty safe bet that this will depress the price. So the natural trade is to sell now (short), and buy later (cover the short). That effectively moves the future price drop to "now", which is likely what we see. This is just one way (of many) in which the market factors future events into today's price, which is sort of the whole point.

They expect locked up shares to hit the market in August and tank the price

"Just weeks"

Weeks is an enormous amount of time now actually. The majority of plays in what people do with stocks is actually very short term. People aren't the kind of Berkshire buy and hold-ers anymore.

If you look it up 60% of options volumes on the S&P 500 is 0 days to expiry. Literally gambling if it goes up and down this day.

Btw its not just the US that's like this. South Koreas 2x single stock ETF debacle and India's Janestreet options story are somehow even more degenerate.

On one hand, I sense that the same people who were in the shorts crowd of the Tesla 'boom or bust' Model 3 era ($TSLQQ) are now piling up against SPCX (e.g. Ed Zitron). Betting again Elon is very risky. And on the other, boy that huge valuation is scary.

The situation could be that there are two intertwined bubbles: an AI-tech-bubble and AI-financial-bubble, both at the same time and only one of them is going to really burst and affect valuations. If that happens, we can only guess the period of time it takes for the S&P 500 to recover.