Ron Baron, the fund manager behind Baron Capital, remains committed to his investments in Elon Musk’s companies, saying that he does not expect to sell his Tesla or SpaceX shares within his lifetime.
The billionaire told CNBC on Friday that, although his investment firm has sold Tesla shares over the past few quarters, he has not “personally” disposed of any.
Questioned about his “huge amount of faith” on both Elon Musk and his companies,
Ron Baron compared Tesla‘s chief executive to Leonardo Da Vinci, saying he’s “an artist.”
Reacting to a video posted on X of the interview, Musk wrote that “Ron is the kind of supporter and friend who is there even when things are super tough. The only kind of friend that matters.”
The interview on CNBC was aired a few hours before the 32nd Baron Conference, hosted in New York City this Friday, in which Baron will be interviewing Musk.
Tesla Stake
When questioned about the time he previously sold Tesla shares, during which he had said he felt “uncomfortable” holding such a large stake as a fund manager, Baron clarified that the sale was done on behalf of his clients.
“Well, I didn’t feel uncomfortable, but my clients felt uncomfortable. And I was being criticized for having such a large investment in one company,” the fund manager said, adding, “I did not sell personally a single share.”
According to the mogul, “nobody else” at Baron Capital wanted to invest in the stock then, so he promised that, once it was done, he would sell any of his stock.
“And then I will be the last person out of the stock,” Baron stated. “I will not sell a single share of my company, of my shares, until my clients have sold 100% of their shares.”
“And I don’t expect to sell in my lifetime, Tesla or SpaceX, either one,” he reiterated.
Baron said he expects Tesla shares to trade at $2,500 in a decade and make “five, six or seven times in ten years” and “four, five times again after that.”
As of press time, Tesla shares are trading nearly 2% higher at $410, resulting in a market cap of $1.36 trillion.
Investments in Musk Companies
Baron has made about $12-13 billion since they started investing in Elon Musk-led companies Tesla and SpaceX.
“I think we’re gonna make five times that next 10 years,” the billionaire added.
Ron Baron said he has invested “about 40% in Tesla and about 25% in SpaceX” from a personal stance, and a “balanced 35%” from its mutual funds.
The fund manager admitted that a “smaller” investment has also been made in xAI, which is still growing.
“We’ve only invested, I guess, $350 million in xAI,” he stated, adding that “it’s now worth $700 million.”
Musk Pay Package
A few days before Tesla’s Annual Shareholder Meeting, Baron Capital confirmed its stance on the proposed CEO pay package, which could total up to $1 trillion.
The company wrote in a statement that they “would be voting FOR.”
“The plan ensures that shareholders win first, and that Elon Musk continues to lead Tesla for many years to come,” the firm noted.
The statement included a commendation for the Board of Directors, who proposed the compensation plan, “for working to retain Tesla‘s most valuable asset.”
Commenting on the pay package on Friday, Ron Baron highlighted the opportunities that Musk is “trying to take advantage of,” for both his clients and for himself.
“So we say, so why is he doing this? Why, when you’re worth that much money, why do you do this? Think about that. Why is he doing this? Why is he working these crazy hours?,” he asked rhetorically.
The billionaire added, “the way I think about it is that he wants to think about how people will remember him, what he’s created, and how he’s helped humanity survive.”
When questioned whether he thinks the pay package will be approved — which can only happen if Musk meets the ambitious targets — Baron said “yes.”
“Sustainable Abundance”
Musk announced last week that Tesla expects to produce 1 million Optimus units in Fremont and 10 million in Texas, construction has begun on a new factory at Giga Texas dedicated to humanoid production.
Questioned about Optimus, Baron said Musk sees the humanoid as the “biggest thing ever.”
“Think about that, a billion a year, $20,000 robots that are going to be labor-saving, make everyone’s life easier,” he noted.
To Baron, “this is the sustainable abundance that he [Musk] talks about. Sustainable energy is what he had before, now it’s sustainable abundance. He thinks everyone’s going to have much better lives, much more prosperous lives.”
