early space x Investor Ron Baron wasn’t looking to profit from his blockbuster debut on the stock market. He was buying more.
The billionaire investor said Baron Capital bought another $1 billion worth of SpaceX stock during Friday’s initial public offering, increasing the company’s position in Elon Musk’s rocket and satellite company to about $25 billion.
The acquisition marks a new vote of confidence from SpaceX’s earliest and most passionate institutional investors, even after the company’s valuation soared to $2 trillion.
“I think we’re going to make hundreds of billions of dollars,” Barron said Monday on CNBC’s “Squawk Box.” “What they’ve done, no one else can do. It’s impossible. So he’s at least 10 years ahead of everyone else in terms of building satellites, building rockets, building networks.”
Mr. Barron said the company participated in the IPO to maintain ownership in the company as it sells new shares to the public.
“I didn’t want it to be diluted,” Baron said. “I wanted $1 billion to keep the percentage…I’m an investor in the business. I’m not buying, selling or trading.”
Baron first invested in SpaceX through an employee tender offer in 2017, when the company was valued at less than $22 billion, and has participated in 27 funding rounds since then.
As of March 31, SpaceX accounted for 33% of the $10.4 billion Baron Partners Fund’s assets and 25.5% of the Baron Asset Fund. Combined with the company’s considerable position in teslaabout half of the assets in some of Barron’s portfolios are tied to companies led by Mr. Musk.
Baron acknowledged that SpaceX’s valuation has increased dramatically since his initial investment, but said he believes the company’s growth potential remains significantly undervalued.
“It’s currently valued at $2 trillion, but in 10 years it will be valued at $20 trillion, $30 trillion, $40 trillion,” Baron said.
The veteran investor argued that Musk’s ambitions go beyond building a successful aerospace company.
“Typically, our economy doubles about every 10 years,” he says. “His idea is that with the innovation and the work he’s doing, he’s going to grow the economy 10 times, not double, in 10 years.”
