TLDR
- Michael Burry considered shorting SpaceX but passed, saying put options are too expensive
- A December 2028 put option with a $100 strike was priced at $25 per contract, with shares at ~$212
- Burry describes SpaceX as a “small space company” generating less than $20 billion in annual revenue
- SpaceX shares have risen more than 25% since its June 12 IPO, making Elon Musk the world’s first trillionaire
- The average analyst price target of $160 implies roughly 20% downside from current levels
Michael Burry, the investor made famous by his bet against the housing market before the 2008 financial crisis, said Tuesday he looked at shorting SpaceX but decided against it.
Space Exploration Technologies Corp., SPCX
Burry wrote on Substack that he reviewed several bearish options trades tied to SpaceX stock but found them too expensive to justify.
A put option with a $100 strike price expiring in December 2028 was priced at around $25 per contract. The stock was trading near $212 at the time.
A shorter-dated contract expiring in June 2027 cost roughly $13. A December 2026 put was priced at about $6.75.
“Tempted by that one. But no thank you,” Burry said of the shorter contract.
He also said he holds no position in SpaceX, neither short nor long.
Burry Questions the Valuation
Despite passing on the trade, Burry raised questions about the company’s worth, which he said has reached nearly $3 trillion just days after its IPO.
He called SpaceX “fundamentally a small space company, a niche telecom, a bedeviled social media company, and a Coreweave-light” that brings in less than $20 billion per year in revenue.
Burry pointed out that SpaceX’s market cap now exceeds Warren Buffett’s Berkshire Hathaway by about two and a half times.
“Berkshire Hathaway has been eclipsed 2 1/2 times over in just three days,” he wrote, describing Berkshire as something “painstakingly assembled over two century-old lives.”
SpaceX Since the IPO
SpaceX went public on June 12. Shares jumped 20% on their first full day of trading.
Since then, the stock has gained more than 25% week to date.
The IPO made Elon Musk the world’s first trillionaire.
SpaceX currently has a consensus Moderate Buy rating from analysts, based on two Buy recommendations and one Sell since the IPO.
The average analyst price target sits at $160, which would represent about 20% downside from where the stock is trading now.
Burry has been warning about stretched valuations for months. Last month he told investors to “reject greed” and said enthusiasm around artificial intelligence is starting to look like the final stages of the dot-com bubble.
He has not changed his view on SpaceX. He said he expects the stock to settle in the mid-$200s and for the volatility priced into options to drain away.
For now, Burry is watching from the sidelines.
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