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Despite Tesla’s stock price remaining flat over the past couple of years—falling from approximately $400 to around $340—Baron reassured investors that the company's fundamentals are solid. He noted that while the stock price appears stagnant, Tesla's revenue has doubled, and net income has skyrocketed by 265%. Furthermore, Tesla has decreased its debt by 10% and increased its cash reserves by 109%.
Baron deduced that a business growing robustly with a flat stock price presents a prime opportunity for investment. This narrative aligns with historical patterns where strong businesses often face periods of stagnant stock prices before ultimately rebounding.