Ron Baron, founder of Baron Capital, has revealed that his firm has quietly amassed a $25 billion position in SpaceX, stemming from roughly $2 billion in invested capital through 27 separate transactions since 2017. Baron projects SpaceX to achieve a valuation of "at least $40 trillion" within the next 10 to 15 years, starting from an IPO valuation of $2 trillion. This ambitious forecast comes from an investor known for successfully predicting Tesla's substantial growth, where he turned a $400 million investment into $7.7 billion in profit.
Baron's investment strategy mirrors his approach with Tesla, involving building positions over years, enduring market fluctuations, and allowing for long-term compounding. His firm, which has grown from $100 million in 1982 to $70 billion by June, now has SpaceX accounting for over a third of its total assets. Baron even invested an additional $1 billion at SpaceX's IPO to maintain his 1.25% ownership stake, indicating a strong belief in the company's future growth potential, similar to Tesla's trajectory over the past decade.
While public market access to SpaceX shares currently shows the stock trading around $135.83 with a market cap of $1.78 trillion, it has faced recent challenges, being down nearly 27% from its post-IPO high. Short-seller sentiment and lockup-unlock anxiety have contributed to this, with roughly a third of tradable shares reportedly being bet against the stock. However, current analyst consensus targets suggest a 12-month upside of 104.86%, with a target of $236.71, though these short-term predictions don't capture Baron's long-term 15-year outlook.
SpaceX's business model, as seen in its SEC filings, is vertically integrated, encompassing launch services, Starlink connectivity, and the recent acquisition of xAI's Grok. Starlink alone generated $4 billion in revenue and $1.6 billion in operating income in the latest quarter. The company, along with other Musk entities, is consolidating into an industrial stack, as evidenced by Tesla's Q1 disclosures showing a $2 billion equity investment in SpaceX and a joint semiconductor fab groundbreaking at Gigafactory Texas.
Other notable investors have also increased their stakes in SpaceX. David Tepper of Appaloosa Management bought 225,000 shares, Philippe Laffont of Coatue Management acquired 18,561,780 shares, Michael Platt of BlueCrest Capital Management purchased 1,417,000 shares, and Chase Coleman of Tiger Global Management bought 375,000 shares in the second quarter. Australia's richest person, Gina Rinehart, also acquired a stake worth over $1 billion. James Murdoch, an early pre-IPO investor, could see his initial estimated $120 million investment now be worth as much as $7.5 billion.
