Michael Burry Says He Considered Betting Against SpaceX but Ultimately Declined
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You might want to know
Could options tied to SpaceX provide a viable way to profit from a potential drop in its share price?
How does Michael Burry, known for forecasting the housing crash, view SpaceX’s valuation and business mix?
Main Topic
Michael Burry, the investor who rose to prominence for anticipating the U.S. housing market collapse before the 2008 financial crisis, recently commented on SpaceX following its notable public markets debut. In a Substack post, Burry said he currently holds no position in SpaceX—neither short nor long—after reviewing several bearish option strategies connected to the company. Although he found some put contracts tempting, he ultimately decided against trading them because of the options’ high prices relative to the risk-reward he perceived.
Burry highlighted specific option prices as part of his assessment. He noted a December 2028 put with a $100 strike was trading near $25 per contract while the underlying stock was around $212. Shorter-dated contracts were less costly but still substantial: a June 2027 put ran roughly $13 and a December 2026 put changed hands near $6.75. Despite finding some of these prices "tempting," particularly the nearer-term contract, he concluded that the implied volatility and premium embedded in the option chain reduced their appeal. He expressed hope that if the stock consolidated in the mid-$200s, option volatility might subside, which could make bearish positions more attractive later on.
Beyond options pricing, Burry questioned the scale of SpaceX’s market capitalization relative to its current revenue profile and businesses. He described the company as essentially a small space operator with a niche telecommunications arm, an underperforming social media element, and a business comparable to CoreWeave in some respects—collectively generating under $20 billion in annual revenue by his estimate. From this perspective, he regarded the company’s valuation as strikingly large compared with established firms and institutional wealth.
Burry emphasized that SpaceX's market worth now eclipses that of several long-standing enterprises, including the storied Berkshire Hathaway, and noted how quickly that comparison shifted following the company's powerful public debut. He pointed out that Berkshire Hathaway’s market capitalization was overshadowed multiple times over the span of only a few days, a fact he used to underscore how rapidly market valuations can diverge from the historical assembly of corporate value.
The broader context for Burry’s remarks is the heightened debate about how much investors are pricing into SpaceX’s multi-faceted operations—commercial rocket launches, satellite internet, and social media components—following a widely watched initial public offering that produced a substantial short-term price surge. Shares jumped roughly 20% on their first full trading day after the debut and have climbed further, producing the first-trillionaire designation for Elon Musk and intensifying scrutiny of whether current valuations are supported by fundamentals.
These remarks also fit into Burry’s longer-running cautionary stance on market enthusiasm for certain technology and momentum-driven sectors. In prior commentary, he advised investors to temper their exposure to rapidly rising tech names and to avoid succumbing to greed amid the fervor around artificial intelligence and other high-growth narratives. He has likened some market behavior to the late-stage passthroughs of the dot-com bubble, warning that speculative excess can overshoot reasonable valuation bounds.
Key Insights Table
| Aspect | Description |
|---|---|
| Burry's Position | No current position in SpaceX—neither short nor long—after evaluating option trades. |
| Options Pricing | Put options were priced at levels (e.g., $25 for a Dec 2028 $100 strike) that Burry found too expensive to justify taking a bearish trade. |
| Valuation Concerns | Burry described SpaceX as a collection of smaller businesses and questioned its multitrillion-dollar market value relative to revenue under $20 billion. |
| Market Reaction | Shares surged after the IPO, pushing valuations higher and sparking debate over whether the market has become overly optimistic. |
| Broader Market View | Burry has cautioned investors to avoid excessive exposure to overheated tech and AI-driven trades, comparing current enthusiasm to past bubbles. |
Afterwards...
Looking forward, investors and analysts should continue exploring how market pricing integrates long-term growth expectations for companies with diversified operations like SpaceX. Key areas for further study include improving methods for valuing multi-segment firms, refining option-implied volatility models for newer listings, and developing clearer metrics to reconcile revenue trajectories with lofty market capitalizations. Continued scrutiny of liquidity and volatility dynamics in newly listed or highly hyped stocks will be important for risk management.
On the technological front, deeper examination of space-based broadband economics, launch-cost trends, and the monetization pathways for social and data services will inform whether current valuations are sustainable. More robust public financial disclosure and transparent performance indicators could help markets better align price with underlying fundamentals over time.
Ultimately, a measured approach to speculative opportunities—one that balances quantitative option analysis with careful evaluation of business fundamentals—remains a prudent guide for investors navigating fast-moving market narratives.