Baron Capital sold $1.8 million in Tesla Shares less than a month the company revealed its $1.5 billion in BTC holdings as we reported back in our Bitcoin news.
Tesla is among the most vocal bullish investors in Bitcoin and now Baron Capital announced that it sold $1.7 million of the shares of its clients. Ron Baron, the founder of the investment management firm said that his firm sold TSLA stocks for the clients because they were apparently taking too much of the percentage of their portfolios but the billionaire investor clarified that he didn’t sell any of his 1.25 million shares:
“It was painful selling every single share.”
The sell-off happened over the course of the past six months and reflected the firm’s plans to secure profits for their clients as the Tesla Stock boomed by 338% to $653 per piece. However, the company didn’t reveal the number of shares that it sold after Tesla revealed the allocation of 8-10 percent of its cash reserves to BTC. Baron Capital was holding about 6.1 million shares and the firm bought them at an average cost of $42.3 per share.
The stocks started correcting lower and logged a new record at $900 so according to the filing with the US SEC, the company started allocating BTC in the same month in order to maximize returns and to diversify. Tesla didn’t disclose the price that BTC was set at when it purchased it but a report from CNBC shows that the firm’s profit was north of $1 billion. Many traditional economists criticized Musk’s decision to exposure Tesla to an asset that is known to be extremely volatile and this included Nouriel Roubini who is an economist that predicted the 2008 financial crisis and advised companies to avoid copying Tesla’s BTC purchase.
The Tesla Stock slipped by 25% after the crypto investment but it’s still unclear whether the share’s correction happened because of overvaluation or the fears that Tesla could lose its cash by exposing itself to the volatile market. Mr. Baron showed his resentment towards the Tesla investment but said that Musk can do whatever he wants with his cash:
“You have to protect yourself against inflation. What we do is invest in these great companies that can grow fast.”
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