Ron Baron Buys Another Billion in SpaceX Shares During Friday IPO

Ron Baron did not sell a single share of SpaceX during the company's initial public offering on Friday. He bought more.

Baron Capital purchased an additional $1 billion worth of SpaceX shares during the blockbuster IPO, according to CNBC. The move brought the firm's total position in Elon Musk's rocket and satellite company to roughly $25 billion. SpaceX's valuation hit $2 trillion when it began trading publicly.

Baron explained his reasoning on CNBC's Squawk Box on Monday morning. He said he bought during the IPO to keep his ownership percentage from shrinking as the company issued new shares to the public.

"I didn't want to get diluted," Baron said. "I wanted a billion dollars to keep our percentage the same ... I'm an investor in a business. I'm not buying and selling or trading."

Baron first put money into SpaceX in 2017 through employee tender offers, when the company carried a valuation of less than $22 billion. He has since taken part in 27 funding rounds. As of March 31, SpaceX made up 33% of assets in the $10.4 billion Baron Partners Fund and 25.5% of the Baron Asset Fund. Combined with his firm's large position in Tesla, roughly half the assets in some Baron portfolios are tied to companies run by Musk.

Despite the enormous run-up in valuation, Baron said he believes SpaceX is still undervalued.

"I think that with now being valued at $2 trillion, I think it's going to be valued in 10 years at $20 trillion, $30 trillion, $40 trillion," Baron said.

He made even broader claims about what Musk's ambitions could mean for the wider economy.

"Normally, our economy doubles roughly every 10 years," Baron 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."

Baron was direct about why he considers SpaceX a singular company. "I think we're going to make hundreds of billions of dollars," he said. "What they've done isn't possible for anyone else to accomplish. Not possible. And so he's at least 10 years ahead of everyone else, as far as making satellites, as far as making rockets, as far as building networks."

SpaceX's IPO drew wide attention as one of the largest and most anticipated public debuts in years. Baron's decision to add to his position rather than take any profit off the table puts him among the more aggressive institutional bulls heading into the company's first weeks as a public company.