Legendary billionaire investor Ron Baron recently revealed that he had added a substantial amount to his stake in Elon Musk’s private space company, SpaceX. Apart from this, Baron also noted that his investment in Tesla has been extremely profitable so far, but he believes that TSLA still has a long way to go up.
Baron, the founder and chief executive of investment management firm Baron Capital, shared his thoughts during a CNBC segment on Thursday. During his segment, Baron noted that he has been investing in healthcare and travel companies. He also revealed that he’s added $100 million to his stake in SpaceX, whose Starlink ramp is hitting its stride.
“The two largest investments I’ve made in the past couple of months are SpaceX, where we added another $100 million, and Figs… the Lululemon of healthcare. We invested about $100 million there,” Baron noted.
Being one of Tesla’s most ardent bulls, Baron also discussed his returns in the electric vehicle maker so far. According to the legendary investor, Baron Capital has made about 20x its investment in Tesla, and he believes that the company could see even more growth in the future. Ultimately, Baron noted that Tesla could very well be the largest company in the world, challenged only by SpaceX about a decade later.
“I love Tesla. We’ve been investing in Tesla for eight years now, since 2014. We’ve made about 20 times our money, made “about six or seven billion dollars on a $380 million investment. I think we’re gonna make 3x to 5x our money again over the next ten years. I am so excited. I think in the next ten years, Tesla is going to be the largest company in the world, and in the ten years after that, it will be challenged by SpaceX,” Baron said.
The Baron Capital founder also highlighted Elon Musk’s notable strategies with his Gigafactories. According to the billionaire investor, each factory that Musk builds costs about $7 billion, but with their run rate of 1 million vehicles per year and the company’s strong gross profit per vehicle, each Gigafactory could provide Tesla with about $15 billion of profit per year.
“What he’s (Elon Musk) doing that other people can’t possibly do is that he is investing now in a plant that makes a million cars per year, about $7 billion. Every time he puts up one of these million car plants, it’s costing him $7 billion. When they have that plant that produces a million cars, the gross profit per car is about $15,000 — they’re selling something for $50,000 but it costs them $35,000. That means that every time he spends $7 billion, he’s making $15 billion a year,” Baron said.
Disclaimer: I am long TSLA.
Don’t hesitate to contact us with news tips. Just send a message to firstname.lastname@example.org to give us a heads up.