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Ron Baron — a longtime Elon Musk investor and a newcomer to the exchange-traded fund universe — is already subverting norms in the $14tn industry.A peek under the hood of the Baron First Principles ETF (which trades under the ticker RONB) reveals a portfolio that, depending on the day, many thought to be impossible: One of its largest holding is SpaceX, a Musk-founded privately held rocket company, with a weighting that has vacillated between 11% and 22% in the past few weeks.The stake often exceeds the 15% ceiling on illiquid assets that US regulations put in place for open-ended funds — a category that includes non-public equities.The reason why Baron Capital is able to do so boils down to a little-known fact about how issuers report their holdings to the Securities and Exchange Commission: Fund firms determine the liquidity classifications of their holdings themselves, rather than US regulators doing so. While “illiquid” securities are capped at the 15% threshold, the other three categories — highly, moderately and less liquid — do not have percentage limits, according to Bloomberg Intelligence. Indeed, Baron Capital is classifying its SpaceX holding in RONB as “less liquid”, a spokesperson confirmed.The RONB episode is blurring the traditionally held boundaries of the ETF wrapper. While the vehicle has expanded to markets such as commodities and cryptocurrencies, the lion’s share of the industry’s assets are concentrated in ETFs that hold publicly listed stocks and bonds. The introduction of private equity and credit has fanned fears about a liquidity mismatch between the underlying holdings and the ETFs themselves, which trade continuously throughout the day. Additionally, there are outstanding questions about how private securities are being classified — for example, while RONB may regard SpaceX shares as “less liquid” securities, other fund managers may treat them differently.“If you’re going to be a new entrant, maybe making a splash is a good thing — thinking from their perspective, it’s a competitive marketplace and how do you stand out? Certainly this makes it stand out, for better or worse,” said Adam Sabban, Associate Director, Equity Strategies at Morningstar. “Having such a large stake in privates is rare, particularly when it’s mostly in one company. Most funds are afraid to bet 15% on any stock, let alone a privately held one.”Baron Capital has been investing in SpaceX in its funds since 2017, and informed the SEC of its plan to classify the shares as “less liquid” given its history of transacting in the stock, according to a person familiar with the matter.RONB is among just a handful of ETFs that hold private assets, though its exposure is by far the largest percentage weighting. The full list includes the $1.7bn ERShares Private-Public Crossover ETF (XOVR), which has a nearly 10% allocation to SpaceX through a special- purpose vehicle. Meanwhile, funds such as the $500mn SPDR SSGA IG Public & Private Credit ETF (PRIV) devote a sliver of their portfolio to private debt.While Baron Capital is new to ETFs, the bottoms-up stockpicking firm has cultivated a loyal following among its mutual fund investors since its founding in 1982. The asset manager is known for its early bets on Musk’s companies, which helped the Baron Partners Fund clinch the title of being the sole actively managed mutual fund to outperform the Nasdaq 100 over the five, 10 and 15 years through July 2023, according to Bloomberg Intelligence.Leaning heavily into private companies such as SpaceX — which is combining with xAI into a larger entity in a deal valued at $1.25tn as it reportedly looks to go public later this year — could help RONB become “the next active ETF star,” Bloomberg Intelligence senior ETF analyst Eric Balchunas wrote in a recent report. While the fund has fallen on a total return basis since its mid-December launch, investors have bought in nevertheless. Nearly $100mn has flowed into RONB so far in 2026, bringing its total assets to $161mn.However, those inflows have exposed a key drawback of private company-heavy ETFs: More money can lead to temporary dilution, given that private shares are more difficult to acquire than public stocks. The opposite is true with outflows: When faced with redemptions, its allocation to SpaceX may increase as the fund sells its more liquid holdings. In the case of RONB, while its SpaceX stake currently sits at about 18%, it stood at nearly 22% two weeks ago, data compiled by Bloomberg show.“Creations and redemptions are being handled through liquid assets, though it does mean private positions can be diluted over time as the fund grows, which is a trade-off investors need to understand,” said Bloomberg Intelligence mutual fund analyst David Cohne.Baron Capital’s move to classify SpaceX as “less liquid” in order to bypass the 15% cap has yet to inspire copycats. While it may be that the “definition of illiquid is changing,” according to Ark Investment Management’s Cathie Wood, her firm opted to go with the interval fund format to invest in private companies in order to exceed that threshold. The ARK Venture Fund counts private companies SpaceX, Figure AI and OpenAI among its top holdings.Additionally, Ark has found that the executives of the private companies that the firm invests in have been reluctant to have their shares included in highly liquid ETFs, according to Wood.“We have actually gone to some of our private companies, the one in the interval fund, saying ‘Hey, we would love to add you into our ETFs because we think this is such an important story’,” Wood said on Bloomberg Television’s ETF IQ. “We found over time that they have been reticent.” 

Elon Musk can't buy Ryanair , but ‌any investment would do ‍better than his returns from X, the airline's boss Michael O'Leary said Wednesday, in the ⁠latest round of a public ⁠spat that O'Leary said was helping Ryanair's bookings.A social media war of ‍words has flared in recent days after O'Leary ruled out using Musk's Starlink internet service on Ryanair's fleet of more than 600 jets.The outspoken airline boss called Musk an idiot, while the US billionaire branded O'Leary an "insufferable accountant".Musk then suggested he might buy Europe's largest airline by passenger numbers and "put someone whose actual name is Ryan ‌in charge". He posted a poll on X and asked his followers to vote on the plan. Around three-quarters approved.O'Leary told a press conference that ‍Ryanair would be a ⁠good investment for Musk, ‌but said European Union rules restricting foreign ownership of airlines meant a takeover was out of the question."If he wants to invest in Ryanair, we would think it's a very good investment, certainly a significantly better investment than the financial returns he's earning on X," O'Leary said, taunting Musk over the performance of his social media platform.Addressing what he called Musk's "Twitter tantrum", O'Leary said the publicity was providing a "wonderful boost" for bookings."They're up about 2% or 3% in the last five days, which, given our volumes, is a ​very significant boost," he said.Ryanair's ‌shares have been little moved during the feud, suggesting most investors are not taking Musk's takeover ⁠threat seriously, though he did ‍ask his social media followers before buying X, previously Twitter.O'Leary said he had held talks with Starlink for 12 months as he considered enabling onboard WiFi but the cost was too high for Ryanair. He said he was seeking a provider willing to invest in installation, and that the ​two sides disagreed sharply on how many passengers would pay for access."The Starlink people believe that 90% of our passengers would happily pay for WiFi access. Our experience, sadly tells us we think less than 10% of our passengers would pay for this access," he said.Last week, O'Leary ruled out equipping any Ryanair jets with Starlink, citing the impact of fuel costs from drag caused by the antenna and estimating the ⁠service could cost the airline up to $250mn a year. 

Elon Musk is seeking up to $134bn from OpenAI and Microsoft, arguing he deserves the "wrongful gains" that ‌they received from his early support of the artificial-intelligence ‌startup, according to a ‍court filing on Friday. OpenAI gained between $65.5bn and $109.4bn from the billionaire entrepreneur's contributions ⁠when he was co-founding OpenAI from ⁠2015, while Microsoft gained between $13.3bn and $25.1bn, Musk said in the ‍federal court filing ahead of his trial against the two companies.OpenAI, Microsoft and Musk's lawyers did not immediately respond to requests for comment outside business hours. OpenAI has called the lawsuit "baseless" and part of a "harassment" campaign by Musk. A Microsoft lawyer has said there is no evidence that the company "aided and ‌abetted" OpenAI.The two companies challenged Musk's damages claims in a separate filing on Friday.Musk, who left OpenAI in 2018 and now runs xAI ‍with its competitor chatbot Grok, ⁠alleges that ChatGPT ‌operator OpenAI violated its founding mission in a high-profile restructuring to a for-profit entity.A judge in Oakland, California, ruled this month that a jury will hear the trial, expected to start in April.Musk's filing says he contributed about $38mn, 60% of OpenAI's early seed funding, helped recruit staff, connect the founders with key contacts and lend credibility to the project when it was created."Just as an early investor in a startup company may realise gains many orders of magnitude greater ​than the investor's initial investment, ‌the wrongful gains that OpenAI and Microsoft have earned - and which Musk is now ⁠entitled to disgorge - are much ‍larger than Musk's initial contributions," Musk argues.The filing says Musk's contributions to OpenAI and Microsoft were calculated by his expert witness, financial economist C Paul Wazzan.Musk may seek punitive damages and other penalties, including a possible injunction, if the jury finds either company liable, the ​filing says, without specifying what form any injunction might take.In their own filing, OpenAI and Microsoft asked the judge to limit what Musk's expert may present to jurors, arguing his analysis should be excluded as "made up," "unverifiable" and "unprecedented" and as seeking an "implausible" transfer of billions from a nonprofit to a former donor-turned-competitor.The companies also disputed Musk's damages figures more broadly, saying the expert's approach is unreliable ⁠and could mislead the jury. 

Elon Musk's Grok has said that it was scrambling to fix flaws in the artificial intelligence (AI) tool after users claimed it turned pictures of children or women into obscene images."We've identified lapses in safeguards and are urgently fixing them," Grok said in a post on X, formerly Twitter.Complaints of abuses began hitting X after an "edit image" button was rolled out on Grok in late December.The button allows users to modify any image on the platform – with some users deciding to partially or completely remove articles of clothing from wearers in pictures, according to complaints.Grok maker xAI, run by Musk, replied to an AFP query with a terse, automated response that said: "The mainstream media lies."The Grok chatbot, however, did respond to an X user who queried it on the matter, after they said that a company in the United States could face criminal prosecution for knowingly facilitating or failing to prevent the creation or sharing of illegal material involving children.Media outlets in India reported on Friday that government officials there are demanding X quickly provide them details of measures the company is taking to remove "obscene ... content" generated by Grok without the consent of those in such pictures.The public prosecutor's office in Paris meanwhile expanded an investigation into X to include new accusations that Grok was being used for generating and disseminating illegal content involving children.The initial investigation against X was opened in July following reports that the social network's algorithm was being manipulated for the purpose of foreign interference.Grok has been criticised in recent months for generating multiple controversial statements, from the war in Gaza and the India-Pakistan conflict to antisemitic remarks and spreading misinformation about a deadly shooting in Australia. 

Chinese auto giant BYD sold 2.26mn electric vehicles last year, a company statement showed Thursday, setting a new record for any firm globally.The figure puts BYD in pole position to outstrip Elon Musk's Tesla in the annual category for the first time, with the lagging Texas-based firm having previously announced 1.22mn in 2025 EV sales by the end of September.Tesla is expected to announce its total EV sales for last year on Friday.Shenzhen-based BYD, which also produces hybrid cars, announced the data in a statement published to the Hong Kong Stock Exchange, where it is listed.Known as "Biyadi" in Chinese — or by the English slogan "Build Your Dreams" — BYD was founded in 1995, originally specialising in battery manufacturing.The automotive juggernaut has come to dominate China's highly competitive new energy vehicle market — the world's largest.Now it is seeking to expand its presence overseas, as increasingly price-wary consumption patterns in China weigh on profitability.BYD and its Chinese competitors face hefty tariffs in the US.But its success is growing in Southeast Asia, the Middle East, and even Europe — to the consternation of traditional industry heavyweights from the continent.Tesla narrowly beat BYD in annual EV sales in 2024, with US company's 1.79mn just outpacing the latter's 1.76mn.Last year, Musk's firm saw sales struggle in key markets over the CEO's political support of US President Donald Trump and far-right politicians.Tesla has also faced rising EV competition from BYD and other Chinese companies, as well as from European giants. 

Tesla's $1tn, 10-year pay package to retain CEO Elon Musk is likely to be approved by shareholders at the company's annual meeting in November even though the amount is staggering.That is because it was crafted with an eye on keeping Musk in place, addressing concerns about the company's technical outlook and giving big company owners just enough reason to back the massive amount, investors and executive pay analysts said.Earlier on Friday, the automaker's board approved what it called "A Super Ambitious Incentive Package for a Pioneering, Ambitious and Unique CEO" that sets out lofty earnings and valuation targets awarding Musk millions of shares over the next decade if he hits them. It immediately gives Musk 96mn shares of restricted stock worth more than $31bn as of intraday trading on Friday that vests over the next two years, as well as more control over the company. His total 2025 compensation package is worth north of $113bn, executive compensation research firm Equilar has estimated."The pay package, which makes a big bet on the future of robots, may see shareholder support," said Taufiq Rahim, a SpaceX investor and principal at 2040 Advisory. "But it raises larger social questions about the outsized gains going to relatively few capital holders, which is likely not sustainable and will face public pressures.”The package is designed to keep Musk from leaving and is squarely focused on transforming Tesla into an artificial-intelligence and robotics powerhouse, the board said in a securities filing. It said Musk is the only person on the planet who can unlock Tesla's full potential.The compensation committee started negotiating Musk's pay package in February, it said, meeting with lawyers 37 times and directly with Musk 10 times over seven months. Certain items were non-negotiable for the idiosyncratic CEO: he wanted 25% of the company, to control Tesla's future direction and to be fully compensated for a 2018 pay package that was hung up in litigation.Musk threatened to leave more than once, and the board worried the company's AI talent would follow him out the door, it said in the filing.The $31bn in restricted shares, which he cannot sell for at least five years, is partial payback for a $56bn 2018 pay plan that a Delaware court voided last year. If Musk wins in court within a certain time frame, he will not receive the one-time payment "so there can be no 'double dip,'" the board said."Musk also raised the possibility that he may pursue his other interests and leave Tesla if he did not receive such assurance," the board said.The pay plan is by far the largest ever for any CEO, Equilar said. And while it is likely to face legal challenges, compensation experts see it winning shareholder approval."Time and time again, Tesla's shareholders have approved these grants over the years," Equilar Research Director Courtney Yu told Reuters. "While it may seem outlandish now, shareholders will get tremendous value out of it if Elon Musk is successful."None of Tesla's three largest outside investors, Vanguard Group, BlackRock or State Street, immediately said on Friday how they would vote. Among them, Vanguard and BlackRock supported Musk's $56bn pay package last year, disclosures show, while State Street funds voted against it.Tesla and top funds can still expect pressure over the pay, however, with a number of union figures and public-sector treasurers voicing concern."We urge shareholders to reject Musk’s money grab, take away the Tesla board’s rubber stamp, and restore basic corporate governance standards," said Randi Weingarten, president of the American Federation of Teachers, in a statement.Musk, who currently controls close to 13% of the company, would own 25% if the plan is approved, so long as he hits his performance targets and sticks around for at least seven more years. Payable over 12 tranches after hitting certain milestones, the ultimate prize could make Tesla the most valuable company in the world with an aspirational market capitalisation of $8.5tn, making it worth more than Microsoft, Meta Platforms and Alphabet combined, today, the board noted.Kristin Hull, founder and chief investment officer of Tesla investor Nia Impact Capital, called the package irresponsible. "This is investor money that could go into R&D or acquisitions, places that would really benefit Tesla in the long term," she said, adding that she is considering a challenge with other shareholders.Dan Coatsworth, investment analyst at AJ Bell, called Musk a visionary but said the pay plan was excessive and could set a bad precedent in corporate governance. He questioned whether Musk was worth that much."He also presides over a company that has lost its edge, is being overtaken by rivals, and whose brand has been tarnished by Musk’s actions outside of Tesla," he said.Tesla’s shares closed up 3.6% at $350.84 on Friday. They are down 13% for 2025, although they have recovered from their lows. Investors worry about its deteriorating electric vehicle business and rising foreign competition."One minute Tesla’s board is wondering if Elon Musk is a liability to the company given his outspoken views and political distractions, the next they’re effectively saying ‘pick a number, any number’ to lock him in for as long as possible," Coatsworth said."Surely Musk should be fighting for his job, not Tesla’s board fighting to keep him?"

Plan highlights Tesla's reliance on Musk amid slowing EV demandAward could boost Musk's stake further if targets metTargets include company hitting market value of $8.6tn in 10 yearsTesla's board has proposed a $1tn compensation plan for CEO Elon Musk in what would be the largest corporate pay package in history, underscoring the hold Musk has over the carmaker as it attempts to transform into an AI and robotics powerhouse.The world's richest person has consistently asked for a bigger stake in the company to gain more control, even as a legal battle over his 2018 pay package — then valued at a mere $56bn — continues. The newly proposed award is roughly 18 times the size of the contested plan and is close to the company's current market valuation.The plan highlights Tesla's reliance on Musk as it faces slowing EV demand, rising competition from Chinese rivals and pressure to deliver on its AI ambitions."While bold compensation tied to performance is nothing new, the sheer scale here sets a new bar for CEO incentives and will dominate boardroom debates everywhere," said Adam Sarhan, chief executive of 50 Park Investments in New York.The regulatory filing puts Musk on a different plane than other technology executives, saying that "traditional compensation packages granted to executives at other companies were determined to not be appropriate for designing Mr. Musk’s incentive compensation."Musk transformed Tesla from a niche EV startup into the world's most valuable automaker, scaling production, expanding globally and pushing the industry toward electric mobility.Recently, however, Tesla has been losing ground to Chinese rival BYD and other automakers amid softening EV demand and intensifying competition in key markets.Supporters of Musk's outsized pay package proposals have argued that his compensation plans have aligned his incentives with long-term growth, while critics have warned of potential dilution and governance risks."This is a ridiculously large pay package. It raises lots of questions, but last year Musk moved Tesla from Delaware to Texas in order to avoid all those questions," said Brian Quinn, professor at Boston College Law School. "Given that Tesla's stock price is basically all vibes and appears to have very little to do with the automaker's actual performance, I suspect they will approve this package."The board said the new award could lift his stake significantly if all targets were met, giving him even greater control as Tesla seeks to become the world's most valuable company.The proposed plan would grant Musk up to 12% of Tesla's stock, worth about $1.03tn if the company hits its target market value of $8.6tn. The plan requires boosting Tesla's valuation nearly eightfold, or about $7.5tn, over the next decade.If fully earned, the award would materially increase Musk's voting power from his roughly 13% stake, intensifying debate over governance and succession.The board said the award would vest in tranches tied to both market capitalisation and operational milestones such as mass production of robotaxis and humanoid robots.Tesla emphasised that Musk would receive no salary or cash bonus, with all compensation linked to performance, echoing the structure of his 2018 plan.The company's shares were up about 4% in early trading.Tesla's board earlier this year approved an interim compensation package for CEO Elon Musk worth about $29bn in restricted stock, designed to keep him at the helm through at least 2030 as the company pivots to an AI-first strategy.Tesla has since reincorporated in Texas and is appealing the Delaware ruling, but the company said the new plan reflects shareholder feedback and stronger governance safeguards.The filing also disclosed that a special committee of independent directors reviewed the proposal, which will go to a shareholder vote in November.Musk's foray into party politics and his willingness to challenge President Donald Trump have heightened concerns among Tesla investors about potential distractions from the company’s core business.In July, Elon Musk announced plans to launch a third political party, the "America Party," following a public clash with Trump over a tax cut and government spending bill.Trump dismissed the idea as "ridiculous," warning that a third party would create chaos. Since then, Musk appears to have slowed the initiative, underscoring his unpredictable approach to politics.Governance experts have said these moves reinforce long-standing worries about Musk's unpredictability and the concentration of power in his hands.Tesla's board has urged shareholders to vote against a proposal calling for a political neutrality policy, which would have expanded board oversight of Musk's political activities.Tesla shares hit a record high late last year after Trump returned to the Oval Office, as investors anticipated regulatory easing that could accelerate the rollout of robotaxis. However, the stock has since retreated from those highs amid Musk's political spat with the president.