SpaceX's stock experienced a sharp pre-market plunge of 5.06% on Friday, extending losses after the company's crucial Starship rocket test was aborted moments before liftoff. The decline comes as the stock has already fallen below its initial public offering price, with mounting pressure from short sellers and concerns over upcoming insider lockup expirations.

The sell-off was triggered by the last-second cancellation of Starship Flight 13, the company's first launch attempt since its historic IPO in June. The test flight was automatically aborted less than a second before scheduled liftoff when multiple Raptor engines failed to ignite properly. CEO Elon Musk stated on social media that two engines would need replacement, with the next launch attempt likely early next week. This mission was intended to validate the V3 system performance and deploy 20 next-generation Starlink satellites, making its success critical to SpaceX's growth trajectory.

Additional factors weighing on investor sentiment include a dramatic surge in short-selling activity, with approximately 29% of the company's publicly available float now sold short according to S3 Partners data. The stock had already closed below its $135 IPO price for the first time during the previous session, and analysts note concerns about upcoming lockup expirations that could unleash significant insider selling after the company's first quarterly earnings report. The combination of technical setbacks and market positioning has created substantial downward pressure on SpaceX shares in early trading.