Michael Burry Skips SpaceX Short Bet Over Expensive Options Pricing

Michael Burry has a gift for spotting trouble before everyone else does.

He famously predicted the U.S. housing collapse ahead of the 2008 financial crisis. That call made him a legend on Wall Street and landed him a starring role in "The Big Short." So when Burry publicly questions a stock's valuation, investors pay close attention.

This time, his sights were set on SpaceX (SPCX).

The rocket company went public last week, and SPCX stock surged more than 20% on the first full day of trading. The blockbuster debut also pushed Elon Musk's net worth past the trillion-dollar mark, making him the world's first trillionaire.

But Burry is not buying into the excitement.

SpaceX's Near-$3 Trillion Valuation Raises Red Flags for Burry

In a Substack post, Burry made his position crystal clear. "I am not involved with SpaceX now. Neither short nor, ahem, long," he wrote, per CNBC.

That said, he did not hold back in expressing his views on what the company is actually worth. Burry described SpaceX as, at its core, a modest-sized space operation, a niche telecom company, a struggling social media business, and a scaled-down version of AI infrastructure firm CoreWeave (CRWV), per CNBC. 

He pointed out that the company is generating under $20 billion in annual revenue, which stands in stark contrast to its enormous market capitalization. To put that valuation in perspective, Burry noted that SpaceX has eclipsed Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B) by about two and a half times, and that milestone happened within just three days of trading. "Berkshire Hathaway, painstakingly assembled over two century-old lives. The two greatest investors of our time," he wrote.

For context, SpaceX's Tuesday rally pushed its market value above Amazon (AMZN), placing it behind only Nvidia (NVDA), Alphabet (GOOGL) (GOOG), Apple (AAPL), and Microsoft (MSFT). 

Why Burry Walked Away From the SpaceX Put Options

As per the CNBC report:

• Burry looked at several ways to bet against the stock. All of them were too expensive to justify pulling the trigger.
• He reviewed a put option with a $100 strike price expiring in December 2028. It was priced at around $25 per contract while the stock traded near $212.
• A June 2027 put cost roughly $13. A shorter-dated December 2026 contract was priced near $6.75.
• Burry added that he would prefer to wait for volatility to ease and for premiums to come down before revisiting any bearish trade.

Put options are contracts that increase in value when a stock falls. The "premium," or upfront cost, reflects how much risk the market believes exists. The steeper the premium, the more confident traders are that the stock could swing sharply. Right now, that cost is just too high for Burry's liking.

SpaceX's AI Ambitions Are Burning Through Cash Fast

There is a reason investors and skeptics alike are watching the numbers closely.

SpaceX filed its S-1 prospectus ahead of the initial public offering, and the numbers inside raised some serious questions. 

The company posted revenue of $18.7 billion in 2025, up roughly 33% from $14.1 billion the year prior. That growth looks strong on the surface, but losses are accelerating just as fast. SpaceX recorded a net loss of $4.27 billion in just the first quarter of this year alone, compared to $528 million during the same period a year ago. 

Since merging with Elon Musk's xAI in February, SpaceX has been spending aggressively to build out massive data centers, including its Colossus facility in Memphis. Over the past five quarters, the business's AI vertical consumed more than $20 billion in capital, representing about two-thirds of the company's total spending, per Fortune.

Last week, research firm New Constructs noted that roughly $62.8 billion, or 78%, of the expected $80 billion in IPO proceeds is already earmarked for insiders and third parties, according to Fortune. That leaves far less fresh capital than many investors assumed would fund the AI expansion.

SpaceX CFO Bret Johnsen acknowledged in a recent investor presentation that the company generated $7.8 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the prior year. But he also noted the company invested $3.6 billion in research and development and $21 billion in capital expenditures during that same period, a large portion of which went toward AI infrastructure.

Burry's broader concern fits a theme he has been pushing for months. He has repeatedly argued that investor enthusiasm for artificial intelligence is starting to resemble the final stretch of the dot-com bubble, per CNBC. 

Last month, he urged investors to reduce exposure to surging technology stocks and warned against letting greed drive allocation decisions. SpaceX may be one of the most exciting companies on the planet. But for Burry, the math does not yet justify the price of the bet.

Out of the six analysts covering SPCX, four recommend “Strong Buy,” one recommends “Hold,” and one recommends “Moderate Sell.” The average SPCX stock price target is $161.25, below the current price of $177.62.