Michael Burry says he’s tempted to bet against SpaceX, but passes on expensive options
Michael Burry, the famed investor known for predicting the U.S. housing collapse before the financial crisis, made headlines recently when he revealed that he has no position in SpaceX. In a SubStack post on Tuesday, Burry stated that he had reviewed several bearish options trades tied to SpaceX but ultimately decided not to take any positions.
One of the key reasons Burry cited for not getting involved with SpaceX was the high cost of options used to wager against the stock. He highlighted that a put option with a $100 strike price expiring in December 2028 was priced at about $25 per contract, which he deemed too expensive given the current stock price of around $212. Similar contracts expiring in June 2027 and December 2026 were also deemed pricey by Burry.
Despite not taking a position in SpaceX, Burry raised concerns about the company’s nearly $3 trillion market value. He described SpaceX as “fundamentally a small space company, a niche telecom, a bedeviled social media company, and a Coreweave-light” with less than $20 billion in annual revenue. Burry questioned the scale of the company’s valuation, noting that it now exceeds the market value of Warren Buffett’s Berkshire Hathaway and many established businesses.
The debate over SpaceX’s valuation has been ongoing, especially following its blockbuster IPO that saw shares surge 20% in their first full day of trading. The historic IPO also propelled Elon Musk to become the world’s first trillionaire. Burry’s comments add to the conversation surrounding the exuberance in technology stocks and the potential risks of overvaluation in the market.
In recent months, Burry has been vocal about cautioning investors to scale back exposure to surging technology stocks, warning against greed and comparing the market’s AI fixation to the final stages of the dot-com bubble. His insights and analysis have been closely followed by investors and market watchers alike.
As the debate over SpaceX’s valuation continues, it will be interesting to see how the company’s stock performs in the coming months and whether Burry’s concerns about its market value prove to be justified. Investors will be keeping a close eye on developments in the space industry and the broader market as they navigate the evolving investment landscape.
