Michael Burry Considered Shorting SpaceX but Declined Due to Valuation
Famed investor Michael Burry, known for his prediction of the 2008 housing crash, recently considered betting against Elon Musk's SpaceX after its initial public offering (IPO). Despite reviewing various trading options, Burry ultimately decided against taking a short position on the rocket company. He expressed skepticism regarding SpaceX's high valuation, describing it as fundamentally a "small space company" amidst other ventures. Financial disclosures revealed increasing revenue but also accelerating losses for SpaceX.
Investor Michael Burry, recognized for his role in "The Big Short," contemplated shorting SpaceX, the rocket company founded by Tesla CEO Elon Musk. This consideration followed SpaceX's recent public offering, which saw its stock gain over 25% and its valuation reach nearly $3 trillion, briefly surpassing Amazon.
Burry, in a Substack post as reported by CNBC, detailed his review of trading options for betting against Musk's company. He noted put options, with one expiring in December 2026 priced at approximately $6.75, when the stock was trading around $212. However, Burry stated, "I am not involved with SpaceX now. Neither short nor, ahem, long," ultimately declining the opportunity.
His decision stemmed from concerns over SpaceX's high valuation. Burry characterized the enterprise as "fundamentally a small space company, a niche telecom, a bedeviled social media company, and a Coreweave-light."
SpaceX's S-1 filing, released prior to its IPO, provided insights into its financial status. The company's full-year revenue for 2025 reached $18.7 billion, a 33% increase from $14.1 billion in 2024. However, the filing also indicated accelerating losses, with an accumulated deficit of $41.3 billion as of March 31. The net loss for the first quarter of this year was $4.27 billion, significantly higher than the $528 million loss reported in the same quarter of the previous year.
Further analysis from David Trainer of research firm New Constructs, based on the S-1 filing, highlighted that a substantial portion of the capital expected from the IPO was pre-allocated. Trainer found that $62.8 billion, representing 78% of the projected $80 billion in capital, was designated for insiders and vendors. This included commitments to Valor Equity Partners, Musk X Corp., xAI investors for debt repayment, and Echostar for a "Spectrum Acquisition Closing."
According to Fortune, these financial insights likely contributed to Burry's decision to forgo a short position against SpaceX.
