Billionaire investor Ron Baron trims Tesla stake, bets on electric truck maker Rivian and autonomous driving start-up Cruise
- A fund managed by billionaire investor Ron Baron trimmed its stake in Tesla after it became a very large percentage of holdings, according to a CNBC interview with Baron.
- Baron is still bullish on Tesla, and thinks the stock could more than triple over the next decade.
- Baron still personally owns more than 1 million shares of Tesla, and he has also invested in car companies Rivian and Cruise.
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Baron Funds, a mutual fund company managed by billionaire investor Ron Baron, has reduced its stake in Tesla after the holding became a very large percentage of client account, according to a Thursday interview with CNBC.
Baron Funds built its stake in Tesla between 2014 and 2016, and since then its initial $318 million stake is now worth about $3.3 billion.
In what was a "painful" moment, Baron sold 1.8 million Tesla shares for clients, about 25% of its stake, between $450 and $900 per share, according ot the interview.
As for his personal stake in Tesla of more than 1 million shares, Baron has yet to sell a single share, according to the interview.
The bullish outlook on Tesla remains for Baron, as he thinks the stock could more than triple over the next decade as it capitalizes on its autonomous driving software. What costs a one-time fee of $10,000 today to enable autonomous driving could cost just $100 per month once Tesla reaches scale, according to Baron.
Disruption in the auto sector remains an investment theme for Baron, as evidenced by new investments the fund manager has made over the past year.
In January, Baron purchased a $10 million stake in Cruise, an autonomous driving start-up that was acquired by General Motors in 2016. The firm is based in San Francisco and has been mapping every street in the city in hopes to eventually offer a robo-taxi service in the city, similar to what Alphabet's Waymo is doing in Phoenix, Baron said.
"They want to use machine learning and artificial intelligence to drive just like you, but better... and if they can do it, that business is going to be a giant home run," Barron said of Cruise.
Baron also highlighted his investment in electric truck developer Rivian, which is partially owned by Amazon. Baron called his private investment in Rivian "really exciting."