Home / Business / Tesla will rise another 400% after the torrid rally this year, says billionaire stakeholder Ron Baron

Tesla will rise another 400% after the torrid rally this year, says billionaire stakeholder Ron Baron

ron Baron
  • Billionaire investor Ron Baron told CNBC Wednesday that Tesla will become a $ 2 trillion company.
  • Baron’s wealth management firm bought Tesla in 2016 when the stock was around $ 40.
  • He said he was focused on Tesla’s business and less concerned about short-term stock movements.
  • The electric vehicle company has grown over 442% year to date.

Legendary investor Ron Baron told CNBC Wednesday that Tesla will increase another 400% to reach a valuation of $ 2 trillion.

The founder of Baron Capital has been a longtime Tesla bull and said he bought it in 201

6, when the stock traded for just $ 40. The stock had a volatile bull run, but is now trading at around $ 450 per share, an increase of over 442% year to date. Baron said he was more focused on Tesla’s business model and not on the stock’s short-term “yo-yo” movements.

“What we care about is not stock prices when we are an investor in a company, we care about business,” he said. “In the short term, I have no idea what’s going to happen. I think – now the market capitalization is over $ 400 billion, it was 40 billion when we started.”

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Baron continued: “I have long said that I thought it was going to be 1 to 2 trillion. With the developments that have occurred recently, I think 2 trillion is the right number.”

Baron said he expects the electric vehicle company to build more factories and have between $ 500 million and $ 800 million in sales over 10 years on cars alone. “Batteries are just another amazing activity that I am very excited about,” he added.

“So far, in the first four or five years we’ve owned it, the stock has been going up and down like a yo-yo, and that’s to be expected,” Baron said. “Because what they were doing was building structures, hiring people, inventing projects. It’s a reasonable thing to bet against them.”

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But Baron Capital relies heavily on Tesla. The company with over $ 39 billion in assets under management has multiple growth funds loaded with shares. Tesla is the first holding in the Baron Partners Fund, which represents approximately 29% of its total investments.

That fund was the leader among general domestic equity funds in the third quarter, according to the New York Times. The second best performing fund was the Baron Focused Growth Fund. Tesla is also the first holding in that fund.

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