Investor's Corner
Ron Baron discusses Tesla, SpaceX, and a curious move by GM
Renowned mutual fund manager and investment icon Ron Baron of Baron Capital is well-known for his conservative, long-term approach to stock picking over his 46 year career. He’s been compared to Warren Buffett (both for his investing style and outstanding track record) and recently created a bit of a stir when he predicted Tesla stock could hit $1,000 by 2020.
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Elon Musk being interviewed by Ron Baron at the 2015 Baron Capital conference (Image: Baron Funds)
Baron Funds second quarter commentary (via Valuewalk) includes a letter from Ron Baron highlighting some fascinating insights surrounding Tesla. To understand businesses, Baron notes the importance of, “the individuals who lead those businesses; and of the character and talent of the individuals… In the end, we think it’s all about people.” Baron cites an unnamed Tesla executive who told him, “It is amazing to me how little most people know about Tesla.”
Baron explains, “Few institutional investors have met with Elon and JB. Fewer still, we’re guessing, have met with the co-founder’s teaching instructor at Stanford. We believe fewer and fewer in the investment industry are performing even the most basic research on businesses… Our meeting with Dr. Yadigaroglu is one example of Baron Funds’ differentiated primary research approach.”

Above: Tesla co-founders, CEO Elon Musk and CTO JB Straubel, in the early days driving Tesla’s Roadster “P1” (Images: Tesla)
Furthermore, it turns out that, “while at Stanford, Ion was the teaching instructor for JB Straubel, Tesla’s CTO and chief engineer. Ion believes JB and his team are better at battery technology than anyone else. It was lucky for Ion that he met both Elon and JB. Ion invested in Tesla when it was just beginning, and so far has made a lot more than he did in eBay. After meeting Ion, we concluded it was lucky for Elon and JB they met Ion as well.”So who is Dr. Yadigaroglu? Baron elaborates, “As part of our ongoing effort to gain further insight into Tesla’s prospects, we recently met with Dr. Ion Yadigaroglu, a venture capitalist. Ion is an engineer with a doctorate in physics from Stanford. Ion has been programming since he was eight years old! Ion’s dad is a prominent nuclear scientist. So much for Ion’s creds. When Ion studied at Stanford graduate school, his roommate founded eBay. Ion’s $1,300 investment in the eBay startup became worth millions. In 1992, at the dawn of the Internet, Ion met Elon Musk. Elon had come to Palo Alto to research battery technologies in Stanford’s labs.”
In studying Tesla, Baron also points out parallels with SpaceX. SpaceX, as Musk had originally envisioned it, has been able to reinvent the aerospace industry by reducing costs and, ultimately, saving millions with it’s reusable rockets. Baron reminds us, “Elon Musk’s SpaceX were [also] awarded contracts to design, build, and fly new spacecraft to ferry U.S. astronauts to the International Space Station (ISS)… The cost of commercial flights to the ISS will be a fraction of the cost of previous government flights, in part because rockets will be reusable.”
Similar to SpaceX, Musk’s emphasis on driving down costs remains mission critical at Tesla. Baron notes, “Despite Tesla’s requirements [for] functional design resulting in minimal waste, it often obtains better pricing for outsourced parts than its competitors. We believe its parts vendors try to accommodate this unique and fast growing company because they think Tesla’s engineering skills and designs will make them better suppliers! Further, since Tesla can insource production, it has the advantage of knowing exactly what a product should cost and how to produce it.”
And, according to Baron, GM is now following Tesla’s lead on this front. He notes that, “Mary T. Barra, General Motors’ CEO who has been trained as an engineer, has instructed her supply chain to ‘use Tesla suppliers…even if they cost more!’ Her rationale is that despite incurring higher costs to build a car, maintenance and warranty costs will be lower; car safety will be improved; and GM’s reputation will be enhanced.” That said, it might be worth pondering whether or not this move was executed strictly for reasons Baron stated in his letter — after all, GM has a tense, and sometimes adversarial, history with Tesla.
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Note: Article originally published on evannex.com, by Matt Pressman
Source: Valuewalk via Baron Funds
Elon Musk
Elon Musk will give ‘every kid in America’ a SpaceX share in 2027
Elon Musk said he is planning to give “every one of his SpaceX shares to every kid in America” in 2027, stating that “this will be the first of many.”
SpaceX went public earlier this year, and its stock price has been relatively stable since leveling off shortly after its IPO. Based on its current price, it’s a gift of just over $10 billion to children across the United States.
It appears to be closely related to President Donald Trump’s bank accounts for children, which were set up earlier this year as Trump Accounts.
Just hours earlier, Anthropic had announced the establishment of its Anthropic Public Benefit Fund, “a new wholly-owned entity dedicated entirely to public benefit.” Musk responded by stating he recommended “giving the shares directly to the public,” and that he would be doing it that way.
Just a little bit later, Musk said children across the U.S. would be getting a share from him:
Next year, I will give one of my SpaceX shares to every kid in America.
This will be the first of many.
— Elon Musk (@elonmusk) October 19, 2026
There are roughly 70 million children, meaning someone under the age of 18, in the United States, according to the Federal Interagency Forum on Child and Family Statistics. Musk’s ownership of SpaceX stock shows he has around 849 million Class A shares of SpaceX stock, according to filings with the SEC.
Investor's Corner
SpaceX’s biggest earnings test yet lands Tuesday, and Tesla shareholders should be watching
SpaceX reports earnings Tuesday as Wall Street watches AI spending, Starlink growth and Tesla merger
SpaceX reports third quarter results after the market closes Tuesday, with a webcast at 4:30 p.m. ET streamed on X, and Tesla follows a day later. Bloomberg consensus, cited by Pepperstone, calls for revenue of $12.89 billion, adjusted EBITDA of $6.62 billion and adjusted EPS near $0.15. That would be about 65% growth from the second quarter and SpaceX’s first profitable quarter since its IPO. Analysts expect roughly $6.4 billion from AI and $4.9 billion from Starlink, which is projected to reach 14.3 million consumer subscribers. Capital spending is forecast at $19.6 billion, leaving free cash flow near negative $11.6 billion.
The numbers matter because SpaceX has spent months trying to win over a skeptical market. It priced its record IPO at $135, spiked to $225.64, then sank near $105 in early August. Friday’s close of $146.03 sits about 28% below the June high. The Q2 report beat on revenue at $7.8 billion and put Starlink at 12 million subscribers, but $18.4 billion of capex hurt the stock. Since then SpaceX reached orbit on Starship Flight 14 with 26 Starlink V3 satellites, agreed to buy 800 MHz spectrum for about $8 billion as part of its Starlink Mobile push, and signed a fourth compute hosting deal in four months worth roughly $13 billion a year from December. Management is targeting more than 2 gigawatts of compute by year end and a $100 billion annualized revenue run rate. Evercore ISI, which raised its target to $275, said the quarter may be judged more on those targets than the reported figures
All of this sits under the Tesla merger question. Barclays analyst Dan Levy expects an all stock deal in which SpaceX buys Tesla at a premium, using reference values of $2.1 trillion and $1.5 trillion, and said an announcement would need to come by late October or early November to be voted on at Tesla’s December 6 annual meeting. Barclays estimates Musk would hold about 37% of the combined company and 56% of the votes. Musk said in July that combining companies cannot be discussed on an earnings call, but an investor question asking when SpaceX will merge with Tesla is sitting on SpaceX’s Q&A platform, and Teslarati has tracked how the Roadster demo revived the talk.
If a deal happens, Tuesday’s result would effectively set the price Tesla holders would receive. Their shares would convert into SpaceX stock, along with exposure to a company with a heavy investment on AI, while Tesla itself expects 2026 capex above $25 billion. A strong quarter and calmer spending would make that exchange easier to sell. Another round of heavy capex and a falling stock would make it harder.
Investor's Corner
Tesla’s flying Roadster just revealed something bigger than the car
Analysts say the Roadster demo puts a Tesla and SpaceX merger back on the table.
The Roadster unveiling near Waco ended Thursday night, and by Friday morning much of the investor reaction had less to do with the car than with who owns the rocket technology inside it.
Wedbush analyst Dan Ives said the event “puts the Tesla/SpaceX relationship on the table in a tangible way,” pointing to the propulsion, pressure vessel and control hardware sitting on a Tesla product. Gene Munster of Deepwater Asset Management called the demo “a ridiculous display of engineering” with “no commercial value” beyond embarrassing traditional automakers, though he said it showed Musk wants the two companies together.
The more specific forecast came a day earlier from Barclays. Analyst Dan Levy told clients a deal could be announced before Tesla’s annual meeting, which must happen by December 6, and that an announcement in late October or early November could make shareholder approval harder. Barclays expects SpaceX to be the buyer in an all stock deal, with Tesla holders receiving SpaceX shares at a premium, based on market values of roughly $2.1 trillion for SpaceX and $1.5 trillion for Tesla. If nothing lands around the meeting, the bank still sees an announcement within 6 to 12 months.
The Roadster demo just added more weight to merger speculations. Tesla’s demo used cold gas thrusters and pressure tanks of the kind SpaceX uses on Falcon 9, and Musk described the car as a collaboration between Tesla and SpaceX engineers, as we mentioned in our breakdown of the three Roadster configurations.
Musk has not publicly addressed a deal since the event, as far as we have seen. His most direct answer remains the one he gave at the All In Summit, when he said that with so much collaboration, “who can imagine what action one might take” without ruling anything out. Ives has held to a 2027 timeline since his March note, and Musk pushed back on the China piece of the speculation when ARK floated a year end announcement in August.
The next test is Tesla’s third quarter earnings call on October 21. However, we recall in July that Musk told analysts, “we can’t talk about combining companies and that kind of thing on an earnings call,” so a clear answer wouldn’t be expected.
