Key Takeaways
- Michael Burry evaluated shorting SpaceX but declined due to expensive put options
- Put options with a $100 strike expiring December 2028 were trading at $25 per contract when shares were around $212
- Burry characterizes SpaceX as a “small space company” with under $20 billion in yearly revenue
- Since debuting on June 12, SpaceX shares have climbed over 25%, elevating Elon Musk to trillionaire status
- Wall Street analysts project an average price target of $160, suggesting approximately 20% potential decline
Michael Burry, renowned for his prescient wager against the housing bubble ahead of the 2008 collapse, revealed Tuesday that he explored taking a short position in SpaceX but ultimately walked away.
Space Exploration Technologies Corp., SPCX
In a Substack post, Burry disclosed that he examined multiple bearish options strategies targeting SpaceX shares but concluded the premiums were prohibitively expensive.
He noted that a put option carrying a $100 strike and expiring December 2028 commanded approximately $25 per contract at the time, with the underlying stock hovering near $212.
A nearer-term option set to expire in June 2027 was valued at roughly $13, while a December 2026 put traded around $6.75.
“Tempted by that one. But no thank you,” Burry remarked regarding the nearer-dated contract.
Burry also clarified that he maintains no exposure to SpaceX—neither bearish nor bullish positions.
Skepticism Over Market Cap
While declining the trade, Burry voiced skepticism about the company’s valuation, which he noted approached nearly $3 trillion mere days following its public debut.
He characterized SpaceX as “fundamentally a small space company, a niche telecom, a bedeviled social media company, and a Coreweave-light” generating under $20 billion annually.
Burry highlighted that SpaceX’s market capitalization now dwarfs Warren Buffett’s Berkshire Hathaway by approximately 2.5 times.
“Berkshire Hathaway has been eclipsed 2 1/2 times over in just three days,” he observed, describing Berkshire as an entity “painstakingly assembled over two century-old lives.”
Post-IPO Performance
SpaceX launched its initial public offering on June 12, with shares surging 20% during their inaugural full trading session.
The stock has continued its upward trajectory, advancing more than 25% week to date.
The public listing catapulted Elon Musk into history as the planet’s first trillionaire.
Wall Street analysts have assigned SpaceX a consensus Moderate Buy rating, reflecting two Buy recommendations and one Sell rating issued since the IPO.
The consensus price target among analysts stands at $160, implying roughly 20% downside from current trading levels.
Burry has been sounding alarms about inflated valuations for several months. In a previous commentary, he urged investors to “reject greed” and suggested that artificial intelligence hype resembles the closing chapter of the dot-com mania.
His stance on SpaceX remains unchanged. He anticipates the stock will stabilize in the mid-$200 range and expects implied volatility in options to diminish over time.
For the moment, Burry remains on the sidelines, observing without participating.
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