Key Takeaways
- Michael Burry explored shorting SpaceX stock but declined the opportunity due to expensive put option pricing
- Put contracts expiring December 2028 with $100 strike prices were trading at $25 each when shares hovered around $212
- Burry characterizes SpaceX as a “small space company” with under $20 billion in yearly revenue
- Since its June 12 public offering, SpaceX shares have climbed over 25%, propelling Elon Musk to become the globe’s first trillionaire
- Wall Street analysts’ consensus price target of $160 suggests approximately 20% potential decline from present trading levels
Michael Burry, renowned for profiting from his prescient wager against the housing bubble ahead of the 2008 crash, revealed Tuesday that he examined taking a short position in SpaceX but ultimately chose not to proceed.
Space Exploration Technologies Corp., SPCX
In a Substack post, Burry disclosed that he analyzed multiple bearish options strategies connected to SpaceX shares but determined the cost was prohibitive.
He noted that a put option contract carrying a $100 strike and December 2028 expiration was commanding approximately $25. At that time, the stock traded close to $212.
A nearer-term contract set to expire in June 2027 was selling for roughly $13. Meanwhile, a December 2026 put was available for about $6.75.
“Tempted by that one. But no thank you,” Burry remarked regarding the shorter-duration contract.
He clarified that he maintains no stake in SpaceX—neither bearish nor bullish.
Valuation Concerns Raised by Burry
Even though he avoided the trade, Burry questioned the company’s valuation, which he noted approached nearly $3 trillion mere days following its initial public offering.
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 emphasized that SpaceX’s market capitalization now surpasses Warren Buffett’s Berkshire Hathaway by approximately two and a half times.
“Berkshire Hathaway has been eclipsed 2 1/2 times over in just three days,” he noted, contrasting it with Berkshire’s legacy “painstakingly assembled over two century-old lives.”
SpaceX Performance Following IPO
SpaceX debuted on public markets June 12. The stock surged 20% during its initial complete trading session.
Following that debut, shares have rallied more than 25% through the current week.
The public offering elevated Elon Musk to become the planet’s first trillionaire.
Wall Street analysts currently assign SpaceX a consensus Moderate Buy rating, derived from two Buy ratings and one Sell recommendation issued since the IPO.
The consensus analyst price target stands at $160, implying roughly 20% downside potential from current trading levels.
Burry has repeatedly cautioned about excessive valuations in recent months. Last month, he urged investors to “reject greed” and suggested that artificial intelligence enthusiasm increasingly resembles the final phase of the dot-com bubble.
His perspective on SpaceX remains unchanged. He anticipates the stock will stabilize in the mid-$200 range and expects implied volatility in options contracts to diminish.
For the present, Burry remains on the sidelines observing.
