Billionaire investor Ron Baron told CNBC on Monday that he thinks Tesla’s acquisition of bitcoin is not “surprising,” but the longtime shareholder of the electric vehicle manufacturer warned that it wants to explore the decision-making process before judge.
Tesla CEO Elon Musk has been commenting favorably on bitcoin for some time, so the announcement about bitcoin [is] not surprising, “Baron co-host” Squawk Box “Becky Quick told Baron.
The Baron has been a Tesla climber for years, and his eponymous investment firm, Baron Capital, has a significant stake in the electric vehicle manufacturer.
“I’m sure they’ve given a lot of thought to Tesla’s acquisition of bitcoin, and I’m looking forward to finding out the rationale,” Baron added in his remarks to Quick, who read them during the broadcast.
Tesla announced in a deposit on Monday at the Securities and Exchange Commission that it bought bitcoin worth $ 1.5 billion and intends to start accepting cryptocurrency for the payment of its products. Musk talked about bitcoin and dogecoin, another cryptocurrency, in recent tweets.
The price of bitcoin rose to a new record high on Monday, after the Tesla acquisition went public, passing over $ 44,000 per coin at one point.
Tesla shares were up more than 1% at the beginning of Monday’s trading session. Shares have fallen over the past 12 months, rising nearly 470% from Friday’s closing price of $ 852.23.
The sharp rise in Bitcoin prices in the last year has coincided with many high-profile investors announcing the cryptocurrency. Paul Tudor Jones, for example, said he believes bitcoin is a strong hedge against inflation. Well-known fintech companies such as PayPal have also made inroads into the cryptographic space, and some believe that institutional adoption has been a factor in the bitcoin rally.
In his remarks to CNBC, Baron highlighted the actions of “serious investors” such as Jones and companies such as PayPal, saying he should have recognized them as soon as possible in order to adopt more bitcoin.
The baron also cited Ark Invest founder and CEO Cathie Wood, a colleague of Tesla uber-bull, as a supporter of bitcoin. Wood is also a major shareholder in Tesla. It has a price target of $ 7,000 per share, so that the electric car manufacturer will be reached by the end of 2024. In February 2018, Wood boldly predicted that Tesla shares will reach $ 4,000 each. Based on the division adjustment, this prediction took place last month.
In June, Baron told CNBC that he thought “there are 10 times more to leave” when Tesla’s stock grows. Since then, the shares have exploded and made almost half of those gains in less than eight months. In August, Tesla split the shares from 5 to 1. The shares have since taken off like a rocket ship. Then, in October, Baron said he believed Tesla would eventually become a $ 2 trillion company. Since Monday, Tesla’s market capitalization has been just over $ 800 billion.