Billionaire investor and Baron Capital CEO Ron Baron says he has given his company the green light to amass 10 figures worth of SpaceX (SPCX) stock.
In a conversation with other Baron Capital executives, Baron say that as SpaceX aims to raise $70 billion from the public markets after its June 12 debut, it wants its investment company to buy $1 billion worth of SPCX stock to avoid dilution.
“So we own about 1.25% of SpaceX. And if you’re going to raise $70 billion, and I don’t want to be diluted, we need a billion dollars.”
According to Baron, he expects huge demand for SpaceX from multiple sources, starting with big money managers who own nothing or very little of Elon Musk’s tech company.
“And there are so many people who are huge money managers, people with $2 trillion, $3 trillion, $1 trillion. They don’t own stocks. And the people who own $7 or $8 trillion own way less than they can. So there’s a huge demand from people who don’t own enough and need to own more.”
With SpaceX’s expected inclusion in the Nasdaq 100 following the implementation of the “fast-track” rule, the billionaire sees additional demand from passive investors.
“And then you have these indexes where passive investors have to invest in those indexes whether they like it or not. If they’re going to duplicate an index, and a new company comes into the index, they have to invest in it. So there’s demand from investors who don’t own one and who have high growth, they have to own that index.”
And then you have people trying to duplicate an index, and they have to own it too. And then you have people like us who say, ‘Boy, I’ve never seen a company like this in my life,’ and I haven’t. Then they must own it too.”
SpaceX is targeting an IPO price of $135 at a valuation of $1.77 trillion.
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Generated image: Midjourney