Michael Burry Describes SpaceX As A 'Small Space Company' And A 'Bedeviled' Telecom: Considered Betting Against It But Options Were Too Expensive

Michael Burry said he is not involved with SpaceX and passed on a December 2026 put option priced at $6.75, while noting a December 2028 $100 strike put was trading around $25 when SpaceX shares were near $212. SpaceX reached a $2.8 trillion market cap and traded as high as $225.64 intraday, after closing up 4.83% at $201.80 and adding another 2.06% in extended trading. The article is primarily a valuation and options commentary piece rather than a fundamental catalyst.

Analysis

The important signal here is not Burry’s view on one name; it is that the listed option market is being used as a valuation pressure valve before fundamentals have time to catch up. When a freshly public, highly narrative asset gets a deep OTM put complex with meaningful premium and implied vol, the market is effectively monetizing skepticism through convexity rather than spot shorts. That tends to create a self-reinforcing liquidity pocket: retail and momentum buyers keep lifting shares while hedgers and skeptics fund the move by selling downside insurance, which can push implied vol down if realized trading stays orderly.

The second-order effect is on competitors and suppliers: a trillion-plus valuation in a capital-intensive, unprofitable platform business raises the bar for every adjacent private aerospace, satellite, launch, and defense-tech issuer. If this multiple survives for weeks rather than days, it will compress the cost of equity for the entire category and encourage copycat issuance, but only if growth can be framed as software-like rather than hardware-like. The market is implicitly saying that scarcity of public exposure matters more than near-term earnings, which can pull incremental flows away from aerospace primes, telecoms, and other “real cash flow” sleeves.

The real risk is a regime shift from narrative momentum to process reality over the next 1-3 months: lockup expiries, insider selling, any sign of margin normalization, or simply options volume failing to expand fast enough to absorb supply. In that case, the downside is less about a crash and more about air pocket repricing as the marginal buyer disappears and put demand becomes too crowded to carry the skew. The most asymmetric bearish setup is a break in momentum after a failed attempt to hold above the recent highs, because that would force both long-only de-risking and vol re-bidding simultaneously.

Key Decisions for Investors

• Avoid outright shorting the stock here; if expressing a bearish view, use limited-risk downside convexity only after the next volatility expansion. Preferred expression: buy 1-3 month put spreads financed partially by selling lower-strike puts, targeting a 2-3x payout if post-IPO momentum breaks.
• If the name trades into the mid-$200s without accelerating volume, initiate a tactical short via call spreads or put spreads rather than stock. Time horizon: 4-8 weeks; thesis is momentum exhaustion, not immediate fundamental rerating.
• Pair trade: long quality aerospace/defense cash flows versus short the newest high-multiple space exposure basket. The relative-value angle is that capital will eventually rotate from narrative beta into businesses with visible free cash flow once IPO excitement cools.
• Watch for lockup/insider-selling catalysts and tighten risk if implied vol starts collapsing while price continues rising. That combination often precedes a sharp air pocket because the market loses the premium buffer that has been absorbing downside supply.
• For volatility exposure, consider a long-gamma structure only if intraday swings widen materially. The best risk/reward is in owning optionality around a regime break, not paying peak premium after the stock has already repriced higher.