However, Burry says the options are too expensive to justify taking a short position against SPCX shares. The famed investor writes in a Substack post that he’s “tempted” to short SpaceX’s stock, “But no thank you.” A short position is basically a bet that a stock’s price will decline over a set period of time.
Burry is famous for shorting the subprime mortgage market prior to the 2008 financial crisis, a winning bet that was chronicled in the book and film “The Big Short.” The investor notes that a put option against SpaceX stock with a $100 strike price that expires in December 2028 is priced at $25 per contract, with the stock currently trading at $201.80 per share. Burry says that’s too expensive for him.
Valuation Concerns
Still, while he isn’t shorting SPCX stock, Burry questioned the company’s valuation, which sits at $2.66 trillion days after the commercial space company held its initial public offering (IPO). Burry says SpaceX is “fundamentally a small space company, a niche telecom, a bedeviled social media company, and a Coreweave-light” that generates less than $20 billion in annual revenue.
He goes on in his Substack post to argue that the company’s market capitalization has reached levels that dwarf many established businesses and fortunes, noting that SpaceX is now worth more than Warren Buffett’s Berkshire Hathaway (BRK.B) and exceeds many national economies.
