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Billionaire financier Ron Baron remains optimistic about Tesla, standing by the company despite its recent significant stock decline. The electric vehicle giant’s stock plummeted by 15% on Monday, marking its most considerable one-day drop since September 2020.
Speaking on CNBC’s “Squawk Box,” Baron expressed his incredulity over Tesla’s current valuation, stating, “I can’t believe how cheap they are, things that we look at.” He shared his belief that Tesla could yield returns four times over the next decade, suggesting that given the recent price drop, those returns might even exceed his initial expectations.
Baron Capital’s founder and CEO, who made a substantial investment of $400 million in Tesla between 2014 and 2016, has seen substantial gains as Tesla has grown into a widely recognized name in the automotive sector. By the end of 2024, Tesla constituted 12% of Baron’s entire investment portfolio across various funds.
The fluctuations in Tesla’s stock have been particularly marked since Elon Musk’s increased involvement in political activities, notably during his tenure in the second Trump administration. Recently, the company has faced a streak of losses, with seven consecutive weeks of declines—the longest since Tesla’s initial public offering on Nasdaq in 2010.
While Baron Capital reduced its Tesla stake in the second quarter of last year due to the size of the holding within the portfolio, Baron remains devoted to his Tesla shares. He committed that his personal shares would be the last to be sold, prioritizing client investments first. “I’m the last in, I’ll be the last out,” he stated regarding his approach to managing his shares.
Musk also acknowledged on Monday the challenges he faces in operating his businesses, particularly while serving as the head of Trump’s advisory Department of Government Efficiency, involved in contentious initiatives aimed at reducing federal government spending and workforce levels across multiple agencies.
Baron commented on Musk’s intense dedication, saying, “He is more charged up about his business now than he’s ever been,” indicating that despite the turbulence, Musk remains deeply engaged and passionate about driving Tesla forward.
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