New York-based Baron Funds reiterated its faith in Tesla (TSLA, Financial) this week after the company hit a series of speed bumps. The long-term-focused firm, founded by noted investor Ron Baron (Trades, Portfolio) in 1982, had about 1.41% of its assets under management wrapped up in Tesla as of March 29.
Baron Funds wrote:
“The stock of Tesla, Inc. has been experiencing significant pressure in the past week or so. In light of the recent volatility, many of our investors have been asking us whether our position on the stock has changed. We would like to assure our investors that our long-term investment thesis on Tesla has not changed, and we have not reduced our position in the stock.”
Tesla’s shares have completely recovered from their plunge last week, trading Friday up 0.51% for the past two weeks after a 21% gain since Monday.
The shares came under pressure when Moody’s downgraded its debt on worries about its cash levels and ability to meet production targets. Also in the week, Tesla issued its largest-ever recall just days after the NTSB announced an investigation into an unrelated fatal car accident involving one of its self-driving electronic vehicles.
Tuesday’s production numbers turned things around for Tesla. Although the company made 2,020 Model 3 cars in the final week of the quarter, falling short of the 2,500 cars it promised, markets expected worse. That day, shares rose almost 5%.
Tesla has slated a target of 5,000 Model 3 vehicles per week for the second quarter. To help meet its goal, CEO Elon Musk has increased his dedication with a more hands-on approach.
“I’m back to sleeping at the factory,” Musk tweeted last week. “Car biz is hell…”
See Baron Funds' portfolio here.
