Michael Burry is questioning SpaceX's $3-trillion market valuation — and says he'd be tempted to bet against it

Put options are among the most common ways investors bet against a stock. They give the holder the right to sell shares at a predetermined price, called the strike price, before a set expiration date. If the stock falls below that level, the investor profits.

Burry says a put option with a $100 strike price expiring in December 2028 was trading at approximately $25. Similar contracts expiring in June 2027 and December 2026 were priced around $13 and $6.75, respectively.

“Tempted by that one. But no thank you,” Burry said of the December 2026 option, adding that “with any luck,” SpaceX stock will settle somewhere in the mid-$200s.

SpaceX’s stock has been trading between $190 and $200 per share following its highly anticipated debut on June 12. If Burry were to buy put options with a $100 strike price, he’d be betting that the stock would fall below $100 — a drop of more than 50%.

Despite his reputation for bearish (or pessimistic) investing, Burry emphasized that he currently has no position in SpaceX.

“I am not involved with SpaceX now. Neither short nor, ahem, long,” he said.

The investor is no stranger to betting against popular companies. A regulatory filing from November revealed the billionaire’s hedge fund purchased five million put options on Palantir, a surveillance tech company that has had an incredible run on the stock market, and one million on giant computer chip manufacturer Nvidia, among others.

Debate over SpaceX’s valuation

Burry hasn’t just decided to pass on wagers against SpaceX. He’s also calling into question its nearly $3-trillion market valuation, calling it “fundamentally a small space company.”

Burry argues the company is still too niche to be able to dwarf many established businesses, fortunes and national economies, pointing out that it still generates less than $20 billion in annual revenue.

“With that $2.8 trillion, SpaceX’s market cap could buy Page, Brin, Bezos, Zuckerberg, Ellison, Arnault, Huang, Buffett, and Ortega and still have $1 trillion left over,” Burry said, naming off a cadre of billionaires.