Key Takeaways
- The ‘Big Short’ investor examined shorting SpaceX but declined, citing expensive put option premiums
- A put contract with a $100 strike expiring December 2028 cost $25, while shares traded around $212
- Burry characterizes SpaceX as a “small space company” with under $20 billion in yearly revenue
- Since going public on June 12, SpaceX shares have jumped over 25%, elevating Elon Musk to trillionaire status
- Wall Street analysts’ consensus target of $160 suggests approximately 20% potential decline from current prices
The legendary investor Michael Burry, renowned for profiting from the 2008 housing collapse, revealed Tuesday that he evaluated shorting SpaceX but ultimately walked away from the opportunity.
Space Exploration Technologies Corp., SPCX
In a Substack post, Burry disclosed that he examined multiple bearish options strategies targeting SpaceX shares but concluded the premiums were unjustifiably high.
One put option carrying a $100 strike and expiring December 2028 commanded approximately $25 per contract, while the underlying stock hovered around $212.
A nearer-term option expiring June 2027 carried a price tag of roughly $13. For December 2026 expiration, the put cost approximately $6.75.
“Tempted by that one. But no thank you,” Burry remarked regarding the shorter-duration contract.
The investor clarified he maintains no stake in SpaceX, either bearish or bullish.
Skepticism About Market Capitalization
While declining the trade, Burry expressed skepticism regarding the company’s valuation, which he notes approached $3 trillion shortly following its public 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 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, describing Berkshire as an entity “painstakingly assembled over two century-old lives.”
Post-IPO Performance Analysis
SpaceX completed its public offering on June 12. The stock surged 20% during its initial full trading session.
From that point, shares have climbed more than 25% on a week-to-date basis.
The public listing 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 recommendations and one Sell rating issued post-IPO.
The consensus price target among analysts stands at $160, implying roughly 20% downside from present trading levels.
Burry has consistently cautioned about inflated valuations in recent months. During the previous month, he advised investors to “reject greed” and suggested that artificial intelligence enthusiasm 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 elevated implied volatility in options to dissipate.
For the moment, Burry remains on the sidelines observing market developments.
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