Michael Burry is ‘tempted’ to short Elon Musk’s SpaceX, but says it’s not enticing enough for ‘fundamentally a small space company’

Michael Burry said he considered shorting SpaceX ahead of its IPO, citing a roughly $3 trillion valuation and describing the company as "fundamentally a small space company" with mixed businesses. SpaceX disclosed 2025 revenue of $18.7 billion, up 33% from $14.1 billion in 2024, but also a $4.27 billion Q1 net loss and a $41.3 billion accumulated deficit. Burry also noted June 2027 put options around $13 and December 2026 puts around $6.75, highlighting bearish sentiment and derivatives interest around the stock.

Analysis

The market is pricing SpaceX less like a capital-intensive launch provider and more like a multi-asset frontier platform, which is exactly why the implied downside in short-dated options looks deceptively cheap. The key second-order issue is not whether Mars is funded by narrative; it is whether IPO demand can absorb a structure where most incremental capital is effectively pre-allocated to legacy claims, leaving public holders with a thinner slice of future optionality than headline valuation suggests. That mismatch tends to compress after the first few lockup/earnings checkpoints, not at listing.

The competitive read-through is actually cleaner for listed proxies than for SpaceX itself: CRWV benefits if investors continue to pay up for scarce AI-infrastructure growth, while MSFT is a cleaner “beneficiary by association” than a direct victim because any re-rating of frontier tech risk assets can spill into mega-cap AI multiples. Conversely, AMZN and TSLA are more vulnerable to a tighter funding regime and a broader skepticism reset around founder-led moonshots; if the market starts discounting narrative-heavy capital allocation, the air pocket usually shows up first in high-duration names with mixed fundamental narratives.

The catalyst path is asymmetric by time horizon. In the next 1-3 months, the dominant risk is reflexive upside from scarcity and prestige demand, which can keep puts expensive to own outright. Over 6-18 months, the cleaner bear case is that public investors demand evidence of cash generation and capital discipline once the post-IPO novelty fades; if operating losses remain persistent, the stock’s multiple will likely be forced back toward a financing-asset framework rather than an empire-building one.

The contrarian view is that shorting the IPO itself may be the wrong expression: the better trade is to fade the second-order crowding into the adjacent beneficiaries of the same “future of tech” basket once the market realizes this listing doesn’t create clean incremental value for everyone involved. If sentiment turns, the fastest unwind is in high-beta venture-adjacent names that are being valued on comparable scarcity narratives rather than on near-term earnings power.

Key Decisions for Investors

• Avoid initiating an outright short in the first 2-4 weeks post-IPO; use that window to buy optionality only if implied vol compresses and borrow remains tight. Better entry: wait for first post-listing unlock/momentum failure before expressing downside.
• If accessible, structure a 6-12 month bearish expression via put spread rather than naked puts to reduce theta bleed: buy downside protection only after the initial scarcity-driven rally fades.
• Long MSFT / short CRWV as a pair over 3-6 months if AI infrastructure multiples re-rate lower; MSFT has balance-sheet durability while CRWV is more exposed to narrative compression. Target 1.5-2.0x gross return on the spread if risk appetite normalizes.
• Underweight TSLA on any broader de-risking in founder-led growth names over the next 1-2 quarters; use rallys to add, since sentiment spillover from a high-profile valuation reset would pressure all Musk-linked assets.
• Watch for a 30-45 day post-IPO consolidation and falling social/media attention as the trigger to initiate bearish exposure; that is typically when retail sponsorship starts to decay and implied vol becomes more favorable.