Investor avoids betting against SpaceX
Michael Burry has expressed serious doubts about SpaceX’s valuation but has decided against taking either a bullish or bearish position in the newly listed company.
The investor who anticipated the US housing collapse before the global financial crisis examined several put options that would profit from a decline in SpaceX shares. Their elevated prices ultimately discouraged him from placing the trades.
“I am not involved with SpaceX now. Neither short nor, ahem, long,” Burry wrote on Tuesday.
Put options remain too expensive
With SpaceX trading near $212, a put carrying a $100 strike price and expiring in December 2028 cost approximately $25. A similar option with a June 2027 expiration was priced near $13, while the December 2026 contract traded at roughly $6.75.
“Tempted by that one. But no thank you,” Burry said about the shorter-term option. “With any luck SPCX will settle up here in the mid $200s and vol will drain out of put option chain.”
His strategy appears to be waiting for calmer trading to reduce option premiums before reconsidering a bearish position.
Business scale clashes with market value
Although Burry has avoided shorting the stock, he questioned whether SpaceX’s operations can justify a market capitalization approaching $3 trillion.
He characterized the group 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.
SpaceX combines rocket launches, satellite internet, artificial intelligence infrastructure and social media operations. Investors are debating how much future growth should already be reflected in the company’s current share price.
Berkshire comparison illustrates the disparity
Burry compared SpaceX with Berkshire Hathaway, the conglomerate built over decades by Warren Buffett and Charlie Munger. SpaceX’s valuation now exceeds Berkshire’s market capitalization by approximately 2.5 times.
“Berkshire Hathaway has been eclipsed 2 1/2 times over in just three days. Berkshire Hathaway, painstakingly assembled over two century-old lives. The two greatest investors of our time,” he said.
The valuation also surpasses that of numerous established industries, major corporations and national economies.
IPO delivers rapid gains for shareholders
SpaceX shares advanced 20% during their first complete trading session following one of the most closely watched public offerings in recent years.
The stock has gained more than 25% since the beginning of the week. The historic listing also increased Elon Musk’s fortune sufficiently to make him the world’s first trillionaire.
Burry renews warning about speculative excess
The SpaceX comments extend Burry’s wider criticism of technology valuations. Last month, he advised investors to reduce their exposure to rapidly appreciating technology companies and to “reject greed”.
He has repeatedly argued that enthusiasm surrounding artificial intelligence and momentum-driven investments increasingly resembles the final phase of the dot-com bubble.
For now, Burry considers SpaceX dramatically overvalued but believes the cost of betting against it remains too high.
