Billionaire investor Ron Baron sold 1.8 million shares of Tesla during the last six months for clients despite believing the stock will increase to $2,000 over the next 10 years.
Baron, a longstanding Tesla shareholder, said Thursday morning on CNBC's "Squawk Box" that his namesake firm sold the shares because they were becoming too large a percentage of some portfolios.
"It was painful selling every single share," he said, adding that he has not sold any of his more than 1.1 million shares of the electric carmaker. He said "risk mitigation" was appropriate for his clients regarding the sale of their shares of Tesla.
Baron Capital held more than 6.1 million Tesla shares as of Feb. 28. They were purchased at an average cost of $42.34 per share.
Shares of Tesla are up 338% in the past year to $653.20 a share. Its market cap is about $619.2 billion.
Baron said he plans to retain his shares for "10 years at least," saying he told Tesla CEO Elon Musk that he "would be the last out."
"We're looking for a lot more," Baron said. "I think in 10 years our target is $2,000 a share."
In June, Baron told CNBC he believed that "there's 10 times more to go" on the upside on Tesla stock. Shares have since shot higher. Then in October, Baron said he believed Tesla would eventually become a $2 trillion company.
Baron has diversified his investments regarding electric and autonomous vehicles outside of Tesla. Most notably, he said his firm is an investor in privately held EV start-up Rivian – an upcoming rival to Tesla – as well as Cruise, an autonomous vehicle company that's majority-owned by General Motors. Baron said his firm purchased more than 1.2 million shares of Cruise for $10 million in January.
Without naming any companies, Baron said he's speculative of other EV start-ups. A handful of companies have or are planning to go public through reverse mergers with special purpose acquisition companies, also known as SPACs or blank-check companies.
"If you think all these companies starting up are going to make it, I think it's a dream," Baron said. "I think it's astonishing they're getting so much capital."
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March 04, 2021 at 07:26PM
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Billionaire investor Ron Baron's firm sold 1.8 million Tesla shares despite saying price will hit $2,000 - CNBC
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