The highly anticipated SpaceX IPO could value the Elon Musk-led space company at $1.5 trillion or more. While that would make the newly public companies one of the most valuable in the world, investor Ron Baron thinks there's still plenty of upside for backers of the company.
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Ron Baron Ready to Buy More SpaceX Stock
Baron Capital CEO and founder Ron Baron has been a big backer of Musk over the years, first with an investment in Tesla Inc (NASDAQ:TSLA) and then followed by the backing of SpaceX in 2017.
Twice a year, SpaceX offers employees the chance to sell their shares. When they do, Baron is among the many investors lined up to buy shares in the currently private company.
Of the $55 billion in assets under management for Baron Capital today, $15 billion is SpaceX stock, the fund's largest holding. That value has risen substantially from the $1.7 billion Baron Capital has put into the space company.
"This is going to become the largest company on the planet," Baron told CNBC.
Baron said the company may IPO at a valuation of $1.5 trillion or $1.75 trillion, but ultimately it won't matter.
"I think the company over the next 10 or 15 years is going to be worth $10 trillion, $20 trillion, $30 trillion, and I could be very low."
Baron highlighted the vision Musk had with launching a reusable rocket, something no one else had done and everyone said was impossible. Going forward, Baron sees SpaceX’s value growing with Starlink and data centers in space.
"Starlink is going to be the internet for the entire planet."
The Baron Capital CEO plans on buying an additional $1 billion in SpaceX stock at the IPO if he's able to get filled.
Baron Stays Bullish on Tesla Stock
Baron met Musk in 2010, but it would be four years before he invested in Tesla and became one of the biggest bulls of the electric vehicle company.
An initial investment of $400 million is worth billions of dollars today, and the second-largest holding for Baron Capital.
Baron sees Tesla stock going higher. Baron said Tesla stock could be up five times in the next 10 years and be in the $2,000 to $2,500 per share range.
Asked about a potential merger of SpaceX and Tesla in the future, Baron said there are pluses and minuses and that he trusts Musk to make the right decision.
"He's not doing this to make as much money as he can."
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