Notorious "Big Short" investor Michael Burry has revealed he was tempted to short SpaceX, but ultimately decided against it due to the prohibitive cost of options. This revelation, made through a since-deleted tweet, offers a rare glimpse into the contrarian investor's thought process regarding one of the world's most valuable private companies.
SpaceX, led by Elon Musk, has achieved remarkable milestones in space exploration and satellite internet with its Starlink service. The company's valuation has soared, making it a coveted asset for investors. However, Burry, known for identifying market bubbles and betting against overvalued assets, saw potential weaknesses. His interest in shorting SpaceX underscores a sentiment held by some that even highly successful companies can become overvalued, especially in a rapidly evolving and capital-intensive industry like aerospace.
While Burry's decision not to proceed highlights the financial complexities and risks involved in shorting such a high-profile, privately held entity, it also raises questions about the sustainability of SpaceX's current valuation. The company's ambitious plans, including its Starship program for interplanetary travel and the continued expansion of Starlink, require substantial ongoing investment. Any perceived misstep or significant delay could have a disproportionate impact on its market perception. Burry's expertise in identifying market dislocations suggests that even disruptors are not immune to critical financial scrutiny.
Given Burry's track record, his initial consideration of shorting SpaceX invites speculation about the company's future financial trajectory. What other major private companies might be on Burry's radar for potential future bets?