“They took a risk with Elon Musk, and it worked out well for them”

Over the years, some of the most prominent investors and investment funds in the world gradually built their position in the company, long before it was valued at the astronomical value at which it is issued today. CNBC reports that the billionaire and CEO of the Baron Capital investment fund Ron Baron, Cathy Wood’s Ark Invest investment fund and the mutual fund giant Fidelity Investments are among the biggest beneficiaries of the offering. Founders Fund, Sequoia Capital and Andreessen Horowitz are also expected to benefit.

Barron is among the leading investors in SpaceX. Barron first invested in the company in 2017 through employee tender offers, when the company was valued at less than $22 billion, and since then has participated in 27 capital raising rounds.

As of the end of March, SpaceX accounted for 33% of the assets of the $10.4 billion Baron Partners Fund and 25.5% of the Baron Asset Fund, making it one of the firm’s most significant investments. During a conference call with investors this week, Barron said that “We believe that SpaceX will become the largest and most profitable company on the planet.” He noted that his firm invested about 2 billion dollars in the company over the years, a share that grew to a value of about 12 billion dollars.

In the case of Cathy Wood’s Ark fund, SpaceX accounts for 11.4% of its total assets under management (over $13 billion) as of March 31, making it the largest investment in its portfolio. Wood told CNBC that Wood indicated that she sees SpaceX as much more than just a launch provider. “Through Starship, Starlink and the acquisition of xAI, we believe SpaceX is building a vertically integrated AI infrastructure for a much broader space economy … For long-term shareholders, an initial public offering (IPO) will provide broader access to a company we believe is still in the early stages of its value creation,” Wood said.

In the case of Fidelity Investments, which manages about $7.1 trillion, the investment fund started buying shares as early as 2015, when SpaceX’s value was estimated at only $10 billion. As of March 31, SpaceX held a 4.7% stake in Fidelity Contrafund, which manages $177 billion and is considered one of the largest active mutual funds in the world.

“They took a risk with Elon, and it worked out for them,” Greg Martin, co-founder and CEO of Rainmaker Securities, told CNBC. “Once they took the risk with Elon, their long-term Cap Table position became a very rare resource, because it’s very tightly managed.” Elon not only paid off for their initial investment, but also allowed them to inject much more capital as the business became an increasingly clear and visible success,” said Martin.