Michael Burry Passes on Shorting SpaceX, Calls It 'Fundamentally a Small Space Company'

Michael Burry Passes on Shorting SpaceX, Calls It 'Fundamentally a Small Space Company'

5 min read•Jun 19, 2026•
Elena Vasquez
Elena Vasquez

Michael Burry, the investor who predicted the 2008 housing crash, said he was tempted to bet against SpaceX after its recent IPO but ultimately passed on expensive put options. His skepticism underscores a growing disconnect between SpaceX’s nearly $3 trillion valuation and its heavy losses, raising doubts about the feasibility of Elon Musk’s Mars ambitions.

What Happened

In a Substack post reported by Fortune, Burry revealed he had reviewed options for shorting SpaceX following its IPO last week. The stock has already surged more than 25%, pushing the company’s market cap close to $3 trillion—briefly surpassing Amazon’s valuation.

Burry described SpaceX as “fundamentally a small space company, a niche telecom, a bedeviled social media company, and a CoreWeave-light.” He said he was “tempted” by a put option expiring in December 2026 priced at roughly $6.75, but ultimately concluded: “But no thank you.”

Why Burry Passed on the Trade

Burry examined two put options: a June 2027 expiry costing about $13 per contract, and the December 2026 option at $6.75. With the stock trading near $212, the premiums were steep enough to dissuade him. He noted that the options were “not enticing enough” given the uncertainty around SpaceX’s actual business fundamentals.

This cautious, value-driven approach is classic Burry. He made his name by betting against subprime mortgages in 2008, and later shorted Tesla and other high-flying tech stocks. Here, he sees a similar overvaluation story—but the price of the bet itself spoils the risk-reward equation.

SpaceX’s Financial Picture: Revenue Up, Losses Up

The S-1 filing SpaceX submitted ahead of its IPO offers a rare look inside the company’s books. Revenue climbed roughly 33% to $18.7 billion in 2025, up from $14.1 billion in 2024. But losses accelerated even faster: the company posted a net loss of $4.27 billion in Q1 2025 alone, compared to $528 million in the same quarter a year earlier. Since inception, SpaceX has accumulated a deficit of $41.3 billion.

Burry pointed out that the company’s core businesses—rocket launches, Starlink satellite internet, and the social media platform X—aren’t generating the kind of returns that would justify a $3 trillion market cap. He likened it to a “small space company” whose value depends heavily on Musk’s long-term vision for Mars colonization.

SpaceX IPO financial chart placeholder — numbers in article

The Musk Short History: A Bet Against the CEO

Betting against Musk can be personally costly. Musk has a history of attacking short sellers, most famously Bill Gates. In 2022, Gates shorted $500 million of Tesla stock, prompting an angry text exchange. Musk later publicly called Gates’ position “crazy” and told him he could not take his climate philanthropy seriously while holding a short position.

Burry knows this firsthand: he previously shorted Tesla and faced Musk’s online ire. Now, with SpaceX public and Musk overseeing multiple ventures—Tesla, X, and a controversial stint in the Trump administration—any short seller risks not only financial loss but public ridicule.

What This Means for the Industry

Burry’s decision to pass on shorting SpaceX is more than a footnote from a famous investor. It highlights a structural tension in the market: retail and institutional investors are pricing in a future that may take decades—if ever—to materialize. SpaceX’s core businesses are real but small relative to its valuation. Starlink has 4 million subscribers and generates about $5 billion in revenue, but faces heavy infrastructure costs. The launch business, while dominant, is also capital-intensive.

For competitors like Blue Origin (Jeff Bezos) and United Launch Alliance, SpaceX’s public status could force more financial transparency. If Burry is proven right and the stock corrects, it could reset expectations for the entire space sector. But if he’s wrong, and SpaceX absorbs losses en route to a Mars settlement, the shorts will be crushed again.

Investors should watch the Q2 earnings report due in August for signs of whether losses stabilize or widen. The next milestone for Musk is Starship’s first orbital cargo mission, which could refuel the narrative—or expose the gap between promise and profit.

Conclusion

Michael Burry’s decision to pass on shorting SpaceX reflects a classic value-investor’s caution: the trade is interesting, but the price of entry kills the thesis. With nearly $62.8 billion of IPO proceeds already spoken for by insiders and vendors, and losses mounting, the risk-reward equation remains tilted toward Musk’s vision—at least for now. Whether the market eventually agrees with Burry or the optimists will depend on how quickly SpaceX can turn its billion-dollar deficits into profitable operations.

Arizona appeals court vacates manslaughter sentence after AI video

An Arizona appeals court vacated the 10.5-year sentence of Gabriel Horcasitas while upholding his manslaughter conviction, first reported by Nytimes. The case returns to Maricopa County Superior Court for resentencing without the video, after judges found that it presented scripted statements as if the victim himself were speaking in court.

The three-judge panel said the video generated a likeness of Christopher Pelkey’s voice and appearance but did not reflect actual events. It found that allowing and relying on the video made the sentencing fundamentally unfair, and noted that no prior Arizona case had addressed the admissibility of such a depiction at sentencing.

The judges said a victim’s right to speak cannot override a defendant’s right to be sentenced on accurate, reliable information. They said the video collapsed the distinction between the family’s belief about what Pelkey would have said and Pelkey’s own voice and opinions.

The ruling distinguishes family members speaking about Pelkey from a generated likeness that appeared to speak for him.

Pelkey’s sister, Stacey Wales, presented the video during Horcasitas’s sentencing alongside victim-impact statements from family and friends. Wales wrote the script and said her husband and the couple’s longtime business partner helped create the video using Pelkey’s voice from a YouTube video and his face and torso from a funeral-service poster.

Judge Todd F. Lang praised the video as genuine, then imposed the maximum sentence of 10.5 years, more than the nine years prosecutors had sought.

Wales said nobody intended to make the court believe Pelkey was alive or that he had recorded the video before his death. She said she disagreed with the ruling and argued that families use slide shows, collages, hypothetical conversations and poetry to convey grief.

Wales compared the AI video with photography, saying it took 15 years of landmark cases around the 1860s before photography was widely accepted in courts.

The case returns to Maricopa County Superior Court for a new sentencing hearing without the AI-generated video.