‘Pretty hairy right now’: Billionaire investor Ron Baron breaks down his X investment

Ron Baron recently gave a candid take on his investment in X about a year after the social media platform, formerly known as Twitter, was purchased by Elon Musk. 

“It is pretty hairy right now,” Baron said on stage at the annual Baron investment conference at Lincoln Center in New York. The billionaire investor — the founder, chief executive officer and portfolio manager at Baron Capital — was asked about his investment during the Friday event.

Baron said he has invested $100 million in X, including $65 million of fund money and $35 million of his own personal capital. The sum is “not critically important,” he said, although the Baron CEO naturally said he is hoping that “it works.” Musk took X private in late 2022.

By contrast, Tesla Inc.
and SpaceX are “cornerstone” investments for the firm, Baron said, with the two Musk-led companies representing 14% of assets. A spokesperson for Baron told MarketWatch at the conference that the firm has about $40 billion of assets under management across its funds, with around 10% in electric-car maker Tesla and 4% in rocket and spacecraft manufacturer SpaceX. 

An email to X’s email address for press inquiries, seeking comment on the performance of the company since Musk’s buyout, received an immediate reply stating, “Busy now, please check back later.”

Citing third-party data, Reuters reported in October that X had year-over-year monthly U.S. ad revenue declines of at least 55% every month since Musk bought the business.

Generally for Baron, the key to investing is “not selling,” which he said sometimes can be hard. 

“Owning, not buying and selling, is how wealth is created,” said Baron, highlighting at the conference his approach to long-term investing.

As he seeks to own companies, Baron said that one thing he looks for is leaders who are “obsessed” with the business’s vision and growth. He pointed to Musk as a visionary obsessed with space engineering and electric cars and said  that SpaceX and Tesla hire the “best engineers on the planet.”

Baron is not the only high-profile investor who has voiced enthusiasm for Musk. 

In May, ARK Investment Management founder and CEO Cathie Wood described him as a  “renaissance man” and expressed support for his leadership of X and Tesla, according to an Axios report that month. In April, ARK estimated Tesla’s shares could skyrocket to $2,000 each in 2027, implying a value of more than $6 trillion for the company.

Tesla shares have soared more than 80% so far this year as of Monday afternoon, with the company trading at a market value of more than $680 billion on Nov. 10, according to FactSet data. 

In Baron’s view, the value of Tesla’s autonomous-driving business alone is more than its market capitalization, estimating at the conference that it’s probably worth around $1 trillion.

DataTrek Research views Tesla as “its own, highly idiosyncratic, animal,” according to an emailed note from the firm on Monday.

“Is Tesla a car company, a Tech company, a clean energy play, or even just a super-charged way to profit from lower interest rates? The answer is ‘none of the above,’” DataTrek co-founder Nicholas Colas wrote in the note. “Tesla is Tesla: a play on the disruptive potential of autonomous driving.” 

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