Tesla Could Be Worth $700 Billion One Day, Billionaire Investor Declares
Fun fact: Just saying that out loud made him $20 million.
According to Bloomberg, aptly-named billionaire investor Ron Baron expects Tesla Motors to grow to a market value of $700 billion (with a "B") in the next 20 years, ultimately making it one of the biggest companies on Earth. That's roughly a 20-fold increase in as many years. Better get those Model 3s rolling, eh, Elon?
Baron's remarks on Tuesday sent Tesla stock up 6.2 percent above its already-healthy numbers. His firm, Baron Capital Management, owns around 1 percent of Tesla's stock. Which means, as a result of Baron's pronouncement, his firm gained around $20 million in value in one day.
In a conversation with CNBC, Baron laid out a plan in which he holds on to his stock for two decades and reaps $6 billion to $7 billion in profits. That sum would require returns of between 15 and 30 percent annually, which any business-school grad will tell you aren't all that common.
The man is undaunted. "This could be one of the largest companies in the U.S.—in the whole world," Baron said excitedly, his net worth climbing as he chattered.
Like any good investor with a net worth in the billions, Baron makes sure to check up on his investments. "Every three or four months, I go visit the factory, and I want to make sure it's developing the way I want it to develop. They are making this factory like the product itself," he said, with blustery vagueness. (On modular architecture? With large LCD screens and a Ludicrous Speed mode? In red?)
Asked about formidable competition from established motoring giants like BMW and General Motors, Baron was bullish. "[The competition] could have caught him four or five years ago, but they can't catch him now. He's too far ahead." With its investments in battery manufacturing and a national charging infrastructure, he says. Tesla is waist deep in electric-car technology—while everyone else out there are just dipping their toes in the pool.
Then again, Ron Baron would want everyone to think that. He does have a literal vested interest in Tesla's growth following a rocket-like trajectory. Or, at least, in the stock market thinking it will.