Michael Burry says he could bet against SpaceX, but skips costly options

Michael Burry says he is tempted to bet against SpaceX, but he passes on expensive options. The reason is straightforward, and it is also the part investors should care about: Burry argues SpaceX's market capitalization has reached levels that dwarf many established businesses and fortunes.

That framing is the core of the trade logic. When an asset's market value starts acting less like a valuation of near-term fundamentals and more like a bet on a near-perpetual future, it creates a specific kind of tension for anyone thinking about risk. Burry is basically pointing at that mismatch. He sees SpaceX's valuation scale as so large relative to the real-world businesses people already know how to analyze that a bearish stance becomes tempting. Then he does something equally revealing: he decides not to execute the options at the price being asked.

To unpack why skipping expensive options matters, it helps to understand how options trading changes the shape of the bet. Options do not just express a view on direction; they price in time, volatility, and expectations about how quickly the market might shift. If the market is paying a premium to buy protection or a bearish position, the option becomes a costly instrument, even if the underlying premise is attractive. In that situation, passing can be rational. It means the investor is not giving up the thesis, but refusing to overpay for the machinery required to express it.

Zooming out, this is also a reminder of how market capitalization works when a company becomes a magnet for narratives. SpaceX is not a typical public company with a long, mature earnings history that can be checked each quarter against a spreadsheet. It is a company that has become tightly associated with a high-stakes, high-uncertainty future: launch cadence, contracts, technology development, and the broader commercialization of space. Those ingredients can support valuation expansion, and they can also make valuations feel untethered from conventional benchmarks.

That is where Burry's specific complaint lands. By saying SpaceX's market capitalization has grown to levels that dwarf many established businesses and fortunes, he is effectively comparing SpaceX's valuation footprint to the size of companies whose operations investors typically understand at a deeper level. It is a way of saying, even if you accept the possibility of extraordinary success, the current price may be assuming an extraordinary level of it already. Whether you agree or not, this is the kind of argument that shows up when markets move faster than the underwriting process.

There is also a second-order corporate governance angle here. When a private or quasi-private asset reaches valuation sizes that look comparable to, or larger than, long-established public firms, it attracts more scrutiny from capital markets and from the broader ecosystem of investors who worry about bubbles, liquidity, and exit paths. Boards and major holders often have to balance growth expectations against the discipline of valuation.