“It hurt”: Long-term investor Baron sells every 4th Tesla share in customer funds

The successful investor and fund provider Ron Baron is one of the greatest Tesla optimists. As early as 2016, he announced that Tesla could become one of the largest companies in the United States and worldwide, and expected several billion dollars in profit from his investment of $ 300 million in the stock at the time. Almost five years later, he actually made billions with it. And as Baron said in an interview, he sees plenty of further price and growth potential at Tesla – but has recently sold around a quarter of the shares in funds for his customers.

Bought Tesla for $ 42.34 a share

The roughly 8 million Tesla shares that Baron bought for his wealth management company Baron Capital through 2016 cost $ 42.34 each, adjusted for split-offs. So by the Tesla highs just under $ 900 this January, they had increased more than twenty-fold, and even after the recent correction to prices close to $ 600, they were still about 14-fold plus. But he has already sold part of it anyway, as Baron said in an interview with CNBC on Thursday.

“We have sold approximately 1.7 million Tesla shares between $ 450 and $ 900 for an average of $ 660-670 in the past six months,” Baron said at the beginning of the interview. At first he did not comment on the reasons, but raved about the continued good prospects for shares and companies. It is becoming increasingly clear that electric cars will dominate, and Tesla is leading the way. As Tesla’s price target over a ten-year period, Baron reiterated $ 2,000 per share and said that could even be $ 500-1,000 too little.

“Electric car business on the stock exchange free of charge”

The presenter still wanted to know more about his Tesla sales. Baron then gave risk management as the reason – after the price had multiplied, the shares had more than 50 percent weight in two of his funds. Baron Capital wanted to reduce this risk and at the same time reduce the debt financing of the portfolios. That seemed appropriate to him, said the founder. But still the “sale of every single share was painful,” because he assumes that Tesla will triple on the stock exchange.

Baron also bought Tesla shares for himself personally – but only when his customers’ portfolios were already full and they didn’t want any more, as he now said. In total there are 1.15 million pieces; He has not sold a single one and has no plans to do so for at least the next ten years. The current Tesla share price is justified by the foreseeable business with the autonomy software FSD, he agreed with CEO Elon Musk – the one with electric cars, batteries, photovoltaics and insurance is, so to speak, free of charge.


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