Billionaire investor and CEO of Baron Capital Ron Baron sees Elon Musk‘s rocket manufacturing company SpaceX being bigger than his EV company Tesla Inc TSLA in the 2030s.
What Happened: Baron appeared in an interview with Marketwatch on Wednesday where he talked about Musk's Tesla and his rocket manufacturing company SpaceX.
“I think SpaceX has a chance to be even bigger than Tesla in the 2030s,” Baron said.
Baron said he has invested approximately $700 million in SpaceX since 2017 and anticipates SpaceX’s valuation to reach $250 billion when it goes public with its satellite internet service Starlink within three years. By 2030, Baron expects SpaceX to be valued between $500 billion and $600 billion.
“And then in the 2030s, that's when I expect to make another 10 times our money,” he added. The investor envisions making 30 to 50 times his money in SpaceX in the next 15-20 years.
The biggest capability of SpaceX, Baron said, is its rocket reusability which allows it to cut costs on space travel.
“So as a result of that, it costs other people to get to space $100 million, $200 million. It costs us a fraction of that amount … Basically, we can get our satellites to space for a very low cost,” Baron said.
See Also: Best Aerospace and Defense Stocks
Why It Matters: Space X is privately held, which makes its financial records difficult to access, as opposed to Musk’s publicly listed Tesla. With a recent valuation of $150 billion, investors looking at sectors like telecommunications and space exploration are closely monitoring SpaceX with expectations of it going public. Musk said in 2021 that Starlink alone will IPO once cash flow becomes reasonably predictable.
In 2022, SpaceX lost $559 million against total revenue of $4.6 billion. It recently became known that Musk took a $1-billion loan from SpaceX to finance his purchase of Twitter, later rebranded to X.
Musk has previously noted that SpaceX has no serious competition thus far, but has said competition would be better for making life multi-planetary.
This year, SpaceX is aiming to lift 80% of the world’s space payload to orbit and is eyeing over 90 launches this year.
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