Billionaire investor Ron Baron is doubling down on SpaceX even after the company’s blockbuster stock market debut pushed its valuation past $2 trillion.
Baron Capital bought an additional $1 billion worth of SpaceX shares during the company’s initial public offering, increasing the firm’s total stake in Elon Musk‘s rocket and satellite company to around $25 billion.
“I think we’re going to make hundreds of billions of dollars,” Baron said on CNBC on Monday. “What they’ve done isn’t possible for anyone else to accomplish. He’s at least 10 years ahead of everyone else.”
Buying more, not cashing out
Many early investors use IPOs as an opportunity to take profits, Baron said he had no intention of selling.
Instead, he participated in the offering to maintain his ownership stake as SpaceX issued new shares to public investors.
“I didn’t want to get diluted,” Baron said. “I wanted a billion dollars to keep our percentage the same. I’m an investor in a business. I’m not buying and selling or trading.”
SpaceX made its Nasdaq debut on June 12 under the ticker SPCX. The stock closed at $161 on its first day, up 19% from its IPO price. The company raised $75 billion in the largest IPO on record, with the listing also helping cement Musk’s status as the world’s first trillionaire.
A bet that started in 2017
Baron first invested in SpaceX in 2017 through employee tender offers, when the company was valued at less than $22 billion. Since then, Baron Capital has participated in 27 funding rounds.
By March 31, SpaceX accounted for 33% of assets in the $10.4 billion Baron Partners Fund and 25.5% of the Baron Asset Fund. Together with the firm’s large Tesla holding, companies led by Musk make up roughly half of the assets in some Baron portfolios.
Regardless of SpaceX’s rapid rise in value, Baron believes the market is still underestimating the company’s long-term potential.
“I think that with now being valued at $2 trillion, it’s going to be valued in 10 years at $20 trillion, $30 trillion, $40 trillion,” he said.
The investor’s confidence is tied not only to SpaceX’s leadership in rockets and satellite communications, but also to Musk’s broader ambitions.
Baron said Musk believes innovation can dramatically accelerate economic growth. While economies typically double in size over a decade, Baron said Musk is aiming for something far bigger through the technologies he is building.
SpaceX’s path to the public markets moved quickly this year. The company confidentially filed with the US Securities and Exchange Commission in April, publicly released its prospectus in May and launched its roadshow in early June. A key part of the company’s valuation story is Starlink, its satellite internet business, which is estimated to have contributed about 58% of SpaceX’s revenue in 2024.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.