Scottish Mortgage's SpaceX Stake Surges 179% as June IPO Looms Over Premium Rally

Scottish Mortgage's record year sees 27.4% NAV return, with SpaceX alone worth £2.98bn—a 179% leap. IPO on June 12 marks key valuation test as trust trades at 6.5% premium.

Scottish Mortgage Investment Trust has capped its strongest fiscal year in recent memory, but the engine behind the revival is anything but diversified. A single private holding—SpaceX—now accounts for roughly a fifth of the £16 billion portfolio, a concentration that has propelled returns while sharpening the debate over risk.

The trust's position in Elon Musk's space and satellite company was valued at £2.98 billion ($3.94 billion) as of 31 March 2026, representing a 179% leap over the financial year. Manager Tom Slater noted the original investment has multiplied roughly 19-fold. Chairman Christopher Samuel attributed the surge to a significant upward revaluation tied to Starlink's operational momentum and the broader recalibration of SpaceX's worth.

IPO Countdown and Public Valuation Test

SpaceX filed a confidential S-1 registration with the SEC on 1 April 2026, followed by the public prospectus on 20 May. The listing is slated for 12 June 2026—a date that will provide the first mark-to-market transparency for a stake Scottish Mortgage currently values at $1.25 trillion. That figure sits below the $1.75 trillion circulating in secondary markets, but the trust's internal valuation team, working with S&P Global, relies on verifiable transactions.

The IPO looms as a pivotal moment. Scottish Mortgage's shares have already priced in optimism: the stock closed at 1,520 pence on Tuesday, up nearly 1.5%, and has gained roughly 29% over the past twelve months. In euro trading, the shares hit €17.84, though they slipped 0.53% on the day. The trust now commands a 6.5% premium to net asset value—a stark reversal from the 9.5% discount at the fiscal year-end.

Starlink and the 'Double Monopoly' Thesis

Slater describes SpaceX no longer as a pure aerospace play but as a "double monopoly" controlling both rocket launches and global satellite internet via Starlink. The orbital assets, he argues, are exceptionally hard to replicate, while Starlink is building recurring, high-margin revenues reminiscent of the best software companies. The recent acquisition of xAI adds another layer of potential that the market is only beginning to price.

That thesis was bolstered on 22 May when the Starship V3 completed its twelfth test flight, this time equipped with the new Raptor-3 engines. Despite an engine failure during ascent, the spacecraft reached its intended trajectory and splashed down controllably in the Indian Ocean, yielding valuable data on the heat shield and structure. The Super Heavy booster, however, fell short—it crashed into the water after an early shutdown.

Portfolio Performance and Structural Shift

Scottish Mortgage delivered a net asset value total return of 27.4% for the year to 31 March, while the share price returned 26.8%, handily beating the FTSE All-World Index's 18.0%. The trust has largely recovered from the growth stock rout of 2022, with long-duration assets finding buyers again in a more favorable interest-rate environment.

Gearing eased slightly to around 11%, with borrowing costs averaging 3.6%. The board authorized an additional £250 million for private company investments following the fiscal year, while ongoing charges remain low at roughly 0.33%. No performance fees are levied.

The largest listed holdings after the first quarter underscore the technology tilt: TSMC accounts for 5.72%, MercadoLibre 3.99%, Amazon 3.56%, ASML 3.22%, and Nvidia 3.17%. A final dividend of 2.79 pence per share is subject to shareholder approval at the annual general meeting in Edinburgh on 2 July 2026.

Valuation Risks and Technical Signals

Despite the robust momentum, caution signs flicker. At 40.6, the relative strength index sits in neutral-to-weak territory, suggesting the recent run may pause. The shares trade more than 12% above their 50-day moving average and have rebounded over 50% from the 52-week low of €11.87. The current P/E ratio stands at 4.63, with a dividend yield of just 0.29%.

Slater acknowledged that the SpaceX weighting is "highly unusual" for the trust and warned against ignoring the potential volatility any single position can introduce. That tension—between the largest return driver and the biggest concentration risk—now moves to centre stage as the June IPO puts the private stake under the public microscope for the first time.