Ron Baron’s Multi-Billion Dollar Bet on Elon Musk 5/12/26

0:00It's smart to always have a few financial goals and a really smart one you can set, earning cash back on what you buy every day. And with Discover, you can. Get this, Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading.

0:45Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Many billion dollar man, investor Ron Barron. To be exact, 55 billion, 898 million. 55 billion? His client portfolio is heavily weighted in Elon Musk-led companies. And the upcoming SpaceX IPO promises to be a big one. This is going to become the largest company on the planet. I think that the company over the next 10 or 15 years is going to be worth$10 trillion,$20 trillion,$30 trillion.

1:34And I could be very low. Why he's bullish on Musk today, tomorrow, forever. You never bet against a guy with superpowers who would never give up. That's him. And the rest of today's news that got us squawking. It's Tuesday, May 12th, 2026. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. We've got some breaking news for you. We, maybe I should say this was as expected, But eBay's board just announcing that it is declining effectively to take up Ryan Cohen's bid from GameStop.

2:25It is saying the following. It's rejecting that bid, saying that eBay's track record of value creating actions and bright standalone projects give it a potential in the future. I think the bigger issue is they're taking some question about the TD Bank, a highly confident letter, which we've discussed before about just how confident and how that would work. It goes on and on and on. It talks about the impact of GameStop's proposal on eBay's long term growth and profitability. And then, of course, the big issue, which I think was pointed up in the interview that that we had to some degree and then later in some of the other conversations that Ryan Cohen had, the issue of dilution.

3:06and how effectively they would pay for the transaction. Delusion? Delusion. Delusion. I heard, but I think it's also delusional too. From watching it, it seemed like it was more delusion than delusion, did it not? You looked sort of, I don't know. You know what, in my own way— Were you puzzled? In my own way, I felt bad because I understood the transaction the whole time, and I didn't understand why he didn't just say, look, we're really not buying the whole company. This is not a classic acquisition because they weren't buying the whole company. In fact, at the end of the day. Oh, my God. You said eBay shareholders would continue to own something like 70 or 80 percent of the company.

3:51And all he had to say was that's how, you know, this is not a classic acquisition with a true 20 percent premium. I mean, maybe. Basically, he wanted to buy GameStop at a premium and then he wanted to run the whole entity. Right. That doesn't sound very good when you say that. And by the way, I'm going to dilute all the shareholders. It's half cash, half stock. I hear you. I'm just saying that that math doesn't get you to the price that you're offering.

4:24That's a pretty straightforward question. I don't get it. Where's the rest of the money coming from? Andrew laid it out pretty clearly. I don't understand your question. We're offering half cash, half stock, and we have the ability to issue stock in order to get the deal done. But the full details of the offer are on our website.

4:50But you're on our air. We thought we'd get.

4:56So I don't understand your question. During our interview, he did for whatever reason. And I don't you know, I have great empathy for others. He didn't say it. It was weird. I was hoping he would. At one point, I was going to stop him and try to explain it for him. I didn't think it was my... It was on vacation, but I didn't agonize over it. But if a company worth X is going to buy a company worth 20X and then just keep saying, well, we're just going to issue stock to do it, it's like, yeah, okay, issue a billion shares of stock so that every... It's like the Mimbabwe dollars. You can't. It's so simple.

5:34And he just was resisting and acting like he didn't understand your questions. And it was just, I don't think anyone was. Michael Rubin was on last week later. He said he thinks the guy's a very smart guy. Didn't think that went well. And, you know, not to take anything away from him, but that was not exactly a confidence inspiring interview. You know, to his credit, in the days after he did a couple of interviews where he did try to explain it. And he talked about that effectively eBay shareholders would have to roll into his deal. But that's what you needed to say, I think, A, on day one. And B, the question is, is it compelling for an eBay shareholder to, quote, unquote, roll in to somebody else's deal like this?

6:15I think that many people saw those other interviews. I saw it on Twitter.

6:21President Trump says the ceasefire deal in Iran is, in his words, on life support. And if you were a family going in to check out your loved one, the doctors would tell you that he has a 1 % chance of making it. Followed the president's rejection of Iran's counterproposal to a U.S. plan to end the war. CNBC's Dan Murphy joins us now with more from Abu Dhabi. And he's been to the tailor the last couple of days. You're looking good. And you get the suits and ties going. You're stepping it up. You're stepping it up. what's going on? Or just getting out of the heat in the region, you could also say, Joe.

7:02But look, in terms of where the conflict is going, obviously, the asset markets responding to this latest headline. In President Trump's own words, the Iran ceasefire is on massive life support. And that is keeping oil well-bid this morning. Axios also reporting that Trump is now actively weighing whether to resume military action against Iran after Tehran delivered a response to the US proposal on Sunday that the president called a, quote, piece of garbage. Of course, Iran, according to reports, rejected any dismantling of its nuclear facilities and also demanded sanctions relief before making any nuclear commitments.

7:37And it took days for Iran to reply as well, which seemed to disappoint the president. Of course, it took him just minutes to reject it. So the options now on the table include resuming Project Freedom to push ships through the Strait of Hormuz, restarting the bombing campaign, or even a special forces operation to secure Iran's enriched uranium stockpile, as suggested by Israel's Prime Minister Benjamin Netanyahu in that 60 Minutes interview. Trump is hesitant, it would seem, on that last one, though, and it's unlikely the US would undertake any major military operation while the president is visiting China.

8:13So we're watching and waiting to see exactly what happens next, particularly on this stalled diplomatic effort. And then meanwhile, a big headline out of the Gulf this morning as well, the Wall Street Journal reporting that the UAE has been conducting military strikes on Iran. Now, after weeks of speculation over whether the country was preparing to get involved or maintain what senior officials told me was a defensive stance, the journal now says Abu Dhabi hit a refinery on Iran's Levine Island in early April, marking its entry into this conflict. Now, the UAE has not publicly confirmed the strikes, but it also hasn't really jumped on this story to deny it either.

8:52CNBC has, of course, contacted the foreign ministry for comment. And for context here, remember, Iran fired more than 2 ,800 missiles and drones at the UAE. That's more than any other country in this conflict, including Israel. And leaders here have always maintained their right to respond. So whether or not this journal reporting is correct, of course, remains to be seen at this point. We're waiting for an official response from the country. But in any case, this is quite a significant step and certainly symbolizes the reset that we've seen in how the country views its own role and responsibility in this region moving forward.

9:30Back over to you. Yeah. I'm just wondering if we can sort of deduce what type of additional military action would make the most sense, given the two blockades basically happening at the same time. But at this point, and it's spelled out in a lot of different op-eds, Iran thinks it can wait out President Trump, that the pressure on him with oil prices and talking about suspending the gas tax shows that there is some pressure. And how long can they wait it out? Well, if they don't care an iota about the populace of Iran, I'm sure they're all doing fine and, you know, dining on fine food and they got plenty of water.

10:22You know, the regime is doing fine. And I don't know when, you know, I don't know when the struggles from the Iranian people take precedence. Maybe it never happens, Dan. Could it be another? this. And if he's not going to do anything while he's in China, then the waiting goes on and, you know, the pressure increases domestically here. It's a fair point. And, you know, as the saying goes, the Americans have the watches, but the Iranians have the time. And of course, the time pressure is pretty critical for President Trump as well, given the fact that he's coming into the midterms, obviously a lot of pressure domestically, politically to wrap this thing up.

11:01What can be achieved in China, I think, is the biggest question at this point. All eyes are on exactly what comes out of Beijing and whether or not President Trump is able to get China's help to pressure Tehran to move the needle here. If we don't see some kind of movement or a breakthrough at the end of the week in China, then obviously the odds of some kind of military action would be increased as well. But what that would look like and what would actually be effective, I think, is a key question at this point as well. Okay. As Joe just mentioned, President Trump is looking at suspending the federal gas tax.

11:39The president said in the Oval Office that he would reduce the tax shortly after saying in a press interview he wants to pause it for a period of time. President Trump can't declare a gas tax holiday by himself. He would need buy-in from Congress. Republican members of both the House and the Senate said that they would introduce bills to suspend the tax. That tax currently stands at 18.4 cents a gallon. That's the same level since 1993. Going all the way back, it has not been adjusted for inflation. AAA says that the average price of a gallon of regular unleaded gasoline nationwide right now is about$4.50.

12:16So when you think about it, 18.5 cents is not going to be a very significant number on a percentage basis, at least. I think for diesel, it's a little higher, maybe 23 or 24 cents a gallon. There are some states that have already suspended the state taxes that they've put into effect. I think Georgia and Indiana have both done that already. Other states have reduced their gas taxes. But people who are on the other side of this argument say, first of all, it's not going to be a substantial decline. It doesn't address the root problem of why oil prices have gone up so high. And in the meantime, it would rob federal funds needed for infrastructure projects that are along the way.

12:56But it is something that's being discussed in Congress at the moment as well. We are learning more about the CEO delegation that will accompany the president to China. White House official telling CNBC that President Trump has invited Tesla CEO Elon Musk, Apple CEO Tim Cook, BlackRock chief Larry Fink and Boeing head Kelly Ortberg. That inclusion of Musk could signal a further thawing of relations between the president and the world's richest person after their public falling out last year. I don't know about that. We can discuss that in a second. Also expected to join the president's delegation, the CEOs of Blackstone, Citigroup, GE Aerospace, Goldman Sachs, Micron, and Qualcomm.

13:36Interestingly, NVIDIA's CEO, Jensen Wang, who has, of course, been in close orbit around the president since his return to office, notably not part of the trip. He told Jim Cramer last week it'd be a privilege to accompany the president to China if he were invited. Of course, it may not make sense for somebody like him to be invited, given that we're not we don't want necessarily to sell those chips. And then he wants to sell those chips. He does. No, he wants to sell those chips, but he would probably also like to lay low at the moment because Congress has not been a big fan. There have been congressional leaders on both sides of the aisle who have not been a fan of allowing those.

14:13Oh, no, I'm sure he wants to he would like to sell those chips and be at that meeting. I think that it's the message. But I think part of this whole situation where who's invited, who's not. is been a messaging story from the White House about what the U.S. wants to sell into China, what they don't want to sell to China. And then separately, I was going to say, I do think to some degree there may be a thawing with the relationship with the president and Elon. And I think you even saw that a little bit at Charlie Kirk's funeral and in other places. But I think the bigger issue, even more than that, is the idea that we do want to sell Teslas and other things like that into China.

14:47So I think it's a bigger, almost economic argument. Some diplomacy at work behind the scenes, probably, on this, too. Yeah. We don't want to sell any of their cars here. No. But we don't want to sell their cars here. Complicates the matter. Cheese will be next. Coming up on Squawk Pod, one of Elon Musk's biggest bulls. That's more than 35 % of your funds that are now in Elon Musk companies. It is Ron Barron. He grew his portfolio from about$10 million in 1982 to 10 times that by 1992. And now he's at$55 billion. And a big chunk of it is wrapped up in the world's richest man. There's a lot of plays that people can have.

15:33I don't need other plays. But you can have a lot of plays that people will benefit from the work that he's doing. I mean, he's accomplished. This is an unbelievable person. An extended exclusive conversation with Ron Barron right after this.

15:53It's smart to always have a few financial goals and a really smart one you can set. Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading.

16:38Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. To realize the future America needs, we understand what's needed from us. To face each threat head on. We've earned our place in the fight for our nation's future. We are Marines. We were made for this. This is Squawk Pod. Stand, Andrew, by. Three, two, one. Up and, Andrew. Here you go, Mike. You're watching Spockbox right here on CNBC. I'm Andra Sorkin, along with Joe Kernan and Becky Quick. We have a lot of ground to cover with our next guest, beginning with Elon Musk's SpaceX, which is planning the largest stock debut in history.

17:26So let's get right to Ron Barrett. He is an early investor in SpaceX. He is the founder, the CEO and the portfolio manager of Barrett Capital, which started out in 1982 with$10 million in assets under management. By 1992, It had grown to$100 million, and today it is around$50.9 billion in assets under management. Ron, I want to thank you for being with us this morning. To be exact,$55 ,898 ,000. $55 billion? $55 billion,$898 ,000. Okay, when you were on with us in November of last year, it was$45 billion. What grew? Oh, SpaceX grew. And I guess I don't know, but I mean, that's the big one. So that happens to be$15 billion out of our$55 or$56 billion is SpaceX.

18:14And Tesla's our second biggest at$5 billion. So we made our clients$61 billion in profits and ourselves since 1992 when we had$100 million. $61 billion came from$100 million. And now I think that in the case of Tesla, which we've been investing in, met him in 2010 in an IPO. It took me four years. to become convinced that he was going to be successful. I thought it was brilliant. Kept talking to him, kept visiting him. 2014, go to visit him again and said, man, I have to invest in this now. Now is the time. Stock triples from 25 to 75. I don't own a share. It doubles again. The pain is too great.

18:56And then we invest$400 million between 2014 and 16 and make about$8 billion so far in profit. And I think we can make five times that amount in 10 years. And then SpaceX, starting in 2017, because I have this relationship with him, it's very good. And I learn about SpaceX and I'm interested in it. I say, I'd like to invest in that. And they do these tenders twice a year in SpaceX because every single employee is a shareholder in SpaceX. I say, Becky, you are this fantastic engineer. You're making$250 ,000 a year, but you're now worth$5 million. Don't you think it'd be a smart thing to sell some of that stock a little bit to put the money in the bank and protect your family?

19:42So they have these tenders twice a year per billion dollars apiece. And we've been one of the largest, if not the largest, purchaser in each of these deals. And recently, and they get oversubscribed without any announcements and no bankers, been oversubscribed in one afternoon. And so we're treated just like one of the largest institutions in each one of these offerings. Basically, you are paying the employees so that they can become more liquid and hold on to those things. And that's how you've gotten your ownership state in this private company at this point. Yes, so we've invested in— Which, by the way, that's part of the reason that this company has been able to remain private for so long.

20:17Yeah, right. And so we've invested about$1.7 billion since 2017. And that's now worth about$15 billion at current market prices. So of the$61 billion profits,$20 billion has come from him. You have been somebody who has been an apostle, kind of speaking about this for years. I can remember having a conversation with you probably back 2020, 2021. You tried to convince me to do it. We're not allowed to invest, and I had to tell you that. But you were saying SpaceX is where it's going to be. This is the investment you really should get into. Had to say no the whole way through. You're now looking at this company about to go public.

20:58And what do you think the opportunity is here? What do you think happens? This is going to become the largest company on the planet. So when you go public, I don't know if it's going public at$1.5 trillion or$1.75 trillion or maybe a little bit more. But where it goes public, I think that the company over the next 10 or 15 years is going to be worth$10 trillion,$20 trillion,$30 trillion. And I could be very low. could be very low on where it's going to be. So today we can talk a little bit about infrastructure. Why? Yeah, let's talk about why, because I think like 70 billion of that would be what the public can actually buy into, I think.

21:4070 billion is exactly right. In fact, right after the offering, then they've changed the rules so that five days after the IPO is completed, there will be one index in which it will be included. Ten days, there will be another index in which it's included. 15 days, there will be another index in which it's included. You're talking about the NASDAQ index? The president of the New York Stock Exchange, you know, when I was young, I drove an ice cream truck one summer, maybe a summer and a half. And one of the things that was important to me was I had to get my Carnival Bar ice cream truck to the beach route before Mr.

22:20Softee got there. And so one of the guys in my office said, And the New York Stock Exchange president wanted to come over and talk to me for some advice. And my friend says, Pat Patalino is our chief operating officer. I said, do you ever think when you're driving an ice cream truck that the president of New York Stock Exchange is going to come talk to you for advice? Are you serious? And I said, well, I was able to beat Mr. Softee to where he was going. So he came to ask you for advice about whether they should put that into the index early? Well, she was telling me about the different indexes, but she was also hoping that they would list on the New York Stock Exchange.

22:57And they chose the NASDAQ. They chose the NASDAQ. I think they've chosen NASDAQ, which is where all the technology companies are. And she was saying that, you know, there are all these other things that she could offer. But that was part of the auction process where the two exchanges were bidding it up saying, hey, we can offer to get you into the index sooner? I don't know. I think they've pretty much decided that as a leading technology company, they should be listed on NASDAQ, where all the other large technology companies have been listed. But there's a lot. So what enabled this company is him.

23:31So he comes up with the idea that you'll be able to launch a rocket and reuse it. And no one ever did that before. and no other rocket company was interested in doing that because if they did, then what would happen is that there would not be a demand for as many rockets. So nobody wanted to do this. And they always said it was impossible. They said it was impossible because nobody tried. And when they did try, nobody's been able to accomplish it. So that's what enabled this. That's what enabled us to have Starlink. And Starlink, after you have that and we have the Falcon 9, then it brings it up and comes back.

24:04Then we decided, wait, wait, there's a demand for in space nice data centers. Instead of having data centers on our planet where it's very, very difficult to get... The governor won in New Jersey because she said, our electricity bills are too high. We're going to stop this data center construction, making our electricity bills go up. Her roommate, when she was in Congress as a candidate for governor in Virginia, she won. Same idea. So here you have people who are saying... Not in my backyard. Yep. That's the deal. And nobody wants it in their backyard, so send it to space. I would have thought they would like it because it would pay taxes, but the people don't like it because, you know, not enough jobs and because their electricity bills are going up.

24:44And the water usage, too. Water is short, and electricity is a problem. And the water you need for cooling, which you don't need in space. Right. You don't need cooling in space, number one, as long as you have giant radiators. And then electricity, which is a huge cost, you don't need that either because you're using the sun. So basically, you're getting free electricity and free cooling. once you get into space. And so now, because of the idea of going to space, we've now developed the Starship. And the Starship, once that works, is going to be 100 times, I guess it's 200 tons that they could bring to space.