Big Short Burry: Really wanted to short SpaceX, but was deterred by the high-priced options.

```

The fervent trading frenzy following SpaceX's IPO is discouraging short sellers.

According to CNBC, Michael Burry, famed for successfully shorting the US subprime mortgage market, stated he currently holds neither a long position nor a short position in SpaceX. The main reason is not based on fundamental judgment of the company, but because the cost of shorting is currently prohibitively high.

Burry wrote on Substack that SpaceX is essentially "a small aerospace company, a niche telecom operator, a troubled social media company, and a 'CoreWeave-light' computing services provider." With annual revenues less than $20 billion, it is valued at around $3 trillion in the market.

As these remarks were made, SpaceX’s stock price continued to surge post-IPO. On its first day, the stock jumped 20%, and in the following week, it rose over 25%. Its market value not only surpassed Berkshire Hathaway but also entered the global top five, just behind Nvidia, Google, Apple, and Microsoft.

Put Options Are Too Expensive, Burry Chooses to Wait and See

Burry revealed that he had studied several SpaceX put option contracts in depth but ultimately abandoned them due to the excessive costs.

Using the then share price of about $212 as a benchmark: puts expiring December 2028 with a strike price of $100 were priced at around $25; the June 2027 contracts at about $13; and the short-term December 2026 contracts at about $6.75.

Burry admitted that although he was “tempted” by the last short-term contract for a moment, after weighing the premium, he still felt it was too high, and decided to stand aside. He further stated that if the share price stabilizes around the $200 range in the future and implied volatility falls from current high levels, the cost of shorting may enter a more attractive zone.

Additionally, Burry compared SpaceX to Berkshire Hathaway: the current market valuation of SpaceX is “2.5 times higher than Berkshire,” while the latter was built brick by brick over nearly two centuries by two of the greatest investors of the era.

Chanos Throws Cold Water: SpaceX Valuation Detached from Business Reality

Another well-known short seller, Jim Chanos, who earned fame for warning about the Enron collapse, directly questioned SpaceX’s valuation right before its IPO.

In an interview at the Global Alts Summit in New York, Chanos stated that SpaceX is currently trading at about 90 times sales, compared to Tesla—which also enjoys the “Musk premium”—with a price-to-sales ratio of only about 14. He commented: “90 times sales versus 10-15 times sales are completely different magnitudes. This is an entirely different beast.”

Regarding Musk’s vision of space data centers, Chanos remains skeptical. He believes that deploying data centers in space faces high launch costs, in addition to issues such as radiation protection, heat dissipation, system redundancy, and insurance. Chanos bluntly stated: “If a critical component fails, you can’t just send an engineer up there with a replacement part like you can on Earth.”

Moreover, Chanos pointed out that SpaceX’s core launch vehicle, Starship, has completed 12 test flights so far but has yet to reach earth orbit. In his view, the current market valuation for SpaceX reflects bets on future visions more than realized business reality.

Risk warning and disclaimerThe market has risks, invest with caution. This article does not constitute personal investment advice, nor does it take into account the particular investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article fit their specific circumstances. If you invest accordingly, you bear your own responsibility. ```