Investor's Corner

Ron Baron’s $300 million stake in Tesla fuels run up in $TSLA

Tesla (NASDAQ: TSLA) stock spent the four trading sessions post the annual shareholders meeting languishing in “compression”, around $220, not moving either way up or down.

On Tuesday, billionaire Ron Baron disclosed that he amassed a $300 million stake in TSLA during the past 3 years, at an average price of $210 a share, and he expects his investment to bring him $6 to $7 billion over the next 10 to 20 years.

Ronald S. Baron (also known as Ron Baron) is the founder of Baron Capital, an investment management firm based in New York City, and manages the Baron Funds, with approximately $26 billion in assets under management.

According to Wikipedia, “Baron grew up in a Jewish family in Asbury Park, New Jersey, one of two children of Morton Baron, an engineer, and his wife Marian. Baron invested $1,000, saved from shoveling snow, waiting tables, working as a life guard, and selling ice cream, and turned it into $4,000 by investing in stocks, prompting cohorts to call him “Count”, a nickname which still sticks.”

Ron Baron worked for several brokerage firms from 1970 to 1982. During this time, he developed a reputation for investing in small, unloved companies. He founded Baron Capital Management in 1982. Baron Capital is well known for its long-term strategy and investment outlook. The firm will typically hold a stock for 4–5 years, sometimes as many as 10–15 years.

According to Forbes, “Baron, who spent summers working as lifeguard, teaching waterskiing and driving an ice cream truck, wanted to be a physician but didn’t get into medical school. So he became a securities analyst in 1970 before opening his own firm. The Jersey native sold his New Jersey house to Bruce Springsteen at one point and now owns one of the biggest estates in the Hamptons, which he assembled from 2001 to 2009 for a total of $152 million. He says the Hamptons home and his Manhattan office (filled with eclectic memorabilia that includes John F. Kennedy’s rocking chair and Babe Ruth’s 1920 Yankees contract) are his favorite places.”

Ron Baron makes the Forbes list of the World’s Top Billionaires at #906, with a net worth of $2.2. billion.

TSLA Stock Action

As result of the disclosure of Ron Baron’s investment, TSLA stock shot up 6% to $234, in early morning trading on Tuesday.

Source: Wall Street I/O

Source: Wall Street I/O

Looking at the indicators, we have now the first positive (green) bar on the pay-day cycles, the MACD is again positive and the stock is now above the 200-day moving average, all positive indicators that could mark the start of another upward run on the stock.

I put in a “probing” trade early this morning, buying September $230 TSLA calls.

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