Ron Baron Adds $1B in SpaceX IPO, Boosting Stake to $25B

Ron Baron wasn't content to sit back and watch his SpaceX stake soar during the stock's market debut. He bought another $1 billion worth.

Baron Capital, the billionaire investor's firm, purchased the additional shares Friday as part of SpaceX's initial public offering. The move lifted the firm's total position in Elon Musk's rocket and satellite company to roughly $25 billion.

Baron first invested in SpaceX in 2017 through employee tender offers at a valuation below $22 billion. He has since participated in 27 funding rounds. The IPO purchase was about preserving his ownership stake.

"I didn't want to get diluted," Baron said Monday on CNBC's "Squawk Box." "I wanted a billion dollars to keep our percentage the same."

The purchase signals a fresh vote of confidence from one of SpaceX's earliest institutional backers. The company's valuation has soared to $2 trillion. Baron thinks that is just the beginning.

The conviction comes with concentrated exposure. As of March 31, SpaceX accounted for 33% of assets in the $10.4 billion Baron Partners Fund and 25.5% of the Baron Asset Fund. Combined with a sizable Tesla position, half of some Baron portfolios depend on Musk-led companies.

Baron acknowledged the valuation has climbed sharply but said the growth potential remains underappreciated. He predicted SpaceX could be worth $20 trillion to $40 trillion in a decade.

"Normally, our economy doubles roughly every 10 years," he said. "What he thinks is, by the innovations and the work that he's doing, he's going to make the economy grow 10 times in 10 years, not double."