Key Takeaways
- Michael Burry examined bearish positions on SpaceX but declined due to expensive put option pricing
- Put options with a $100 strike expiring December 2028 carried a $25 premium, while shares traded around $212
- Burry characterizes SpaceX as a “small space company” with under $20 billion in yearly revenue
- SpaceX stock has surged over 25% following its June 12 public debut, propelling Elon Musk to trillionaire status
- Analysts’ consensus price target of $160 suggests approximately 20% potential decline from present trading levels
Michael Burry, the legendary investor who famously profited from betting against subprime mortgages during the 2008 collapse, revealed Tuesday that he explored shorting SpaceX shares but ultimately walked away.
Space Exploration Technologies Corp., SPCX
In a Substack post, Burry disclosed that he analyzed multiple bearish options strategies targeting SpaceX stock but concluded the premiums were unjustifiably high.
Specifically, a put option carrying a $100 strike and December 2028 expiration commanded approximately $25 per contract. At that moment, the stock hovered near $212.
A more immediate contract set to expire in June 2027 cost around $13. Meanwhile, a December 2026 put was trading at roughly $6.75.
“Tempted by that one. But no thank you,” Burry remarked regarding the near-term contract.
He clarified that he maintains no stake in SpaceX—no short position and no long holdings either.
Skepticism Over Market Capitalization
While declining to execute the trade, Burry expressed substantial doubts about the company’s valuation, which he noted approached $3 trillion mere days following its market 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 roughly two and a half times.
“Berkshire Hathaway has been eclipsed 2 1/2 times over in just three days,” he noted, referring to Berkshire as something “painstakingly assembled over two century-old lives.”
SpaceX Performance Following Market Debut
SpaceX launched its initial public offering on June 12. The stock rocketed 20% during its inaugural full trading session.
From that point forward, shares have climbed more than 25% through the current trading 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 after the IPO.
The mean analyst price target stands at $160, implying roughly 20% downside from current trading prices.
Burry has persistently cautioned about inflated valuations in recent months. During the previous month, he urged investors to “reject greed” and noted that artificial intelligence enthusiasm increasingly resembles the terminal 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 embedded in options premiums to dissipate.
For the time being, Burry remains an observer rather than a participant.
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