"Tempting, but no, thanks": Short seller Michael Burry Decided Not to Bet Against SpaceX
At the same time, he considers Elon Musk's company to be a "niche telecom" and a "troubled social network"
Options betting on a drop in SpaceX stock remain too expensive, according to Michael Burry / Photo: Fedor Selivanov / Shutterstock.com
Investor Michael Burry, who served as the inspiration for the protagonist in the movie *The Big Short*, stated that he has no position in SpaceX: neither a long nor a short. In a post on Substack, the iconic short seller called the options that allow investors to bet on a decline in the stock price of Elon Musk’s space company too expensive. At the same time, he questioned the fairness of the company’s market valuation, which exceeded $2.6 trillion on Tuesday, June 19.
According to Burry, he was considering several put options—instruments that gain value when stock prices fall. One of the contracts mentioned by the financier allows a trader to profit if SpaceX stock falls below $100 by December 2028. The cost of such an option was about $25 when the stock price was around $212. A similar contract expiring in June 2027 cost about $13, while a put expiring in December 2026 was trading at around $6.75. “This option is tempting. But no, thanks,” wrote Burry. “If we’re lucky, SpaceX will settle in the middle of the $200+ range, and volatility in the put option chain will decline.”
At the same time, Burry described SpaceX as “essentially a small space company, a niche telecom provider, a troubled social network, and a stripped-down version of CoreWeave,” and pointed out that its annual revenue does not even reach $20 billion. He noted that SpaceX’s market capitalization has reached levels that dwarf many long-established businesses and fortunes and exceed the size of many industries or even the entire GDP of national economies, such as those of Russia and Italy.
“For SpaceX’s market value, one could buy every single U.S. aerospace and defense company, and still have enough money left over to buy every gold mining company and every airline in the world,” Burry emphasized.
His comments are fueling the debate over whether investors are placing too high a value on SpaceX, CNBC notes.
By the close of trading on June 16, SpaceX shares had risen 50% from their offering price. The company went public on Friday, and options on its shares began trading on Tuesday, with the number of call option trades in a single session nearly reaching 1 million, according to Barron's. In terms of trading volume, SpaceX stock options ranked fifth in the market, placing them alongside traditional leaders—Nvidia and Tesla stock options.
This article was AI-translated and verified by a human editor
