Billionaire Ron Baron believes his company’s $25 billion stake in Elon Musk’s rocket company, SpaceX (SPCX), will increase in value over time.
In a new CNBC interview, the founder and CEO of Baron Capital say he expects the company to make “hundreds of billions of dollars” from its SpaceX investment.
Baron explains how he thinks SpaceX will go from a market cap of roughly $2 trillion to $14 trillion in ten years.
“And I think in ten years, Starlink’s revenues will go from $13 to $14 billion to about a trillion. So I think in ten years there will be a trillion dollars in revenues, and about $700 or $800 billion in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and that will be worth somewhere around $14 trillion, $14 trillion. The company is now valued at $2 trillion. That’s just Starlink. So basically you’re going to make seven times your money just for Starlink… And that’s still an immature business.”
In addition to Starlink, Baron emphasizes that SpaceX will likely launch data centers in space next year to generate additional revenue.
“Then you have computer AI. Those are data centers in space. If you want AI, you have to have data centers. Data centers, you can no longer build on Earth,
no longer on our planet, no longer in the United States, without political disruption.”
SPCX is trading at $191.82 at the time of writing.
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