Scottish Mortgage Flips Script: Premium Issuance Replaces Buybacks as £3bn SpaceX Bet Swells

Scottish Mortgage Investment Trust issues shares at a premium after a rapid discount-to-premium swing, fueled by SpaceX’s soaring valuation and a 27.4% NAV gain.

Scottish Mortgage Investment Trust has traded its buyback programme for a share issuance strategy after its stock swung from a 9.5 per cent discount to a premium in a matter of weeks, reflecting renewed investor appetite for its outsized private-market bets. The trust placed 600,000 fully paid treasury shares at 1,428.50 pence each on 11 May, a price that sat above the prevailing net asset value. Management used the move to meet surging demand without diluting existing holders.

The shift in capital allocation follows a blistering run that has left the trust’s return well ahead of global equity benchmarks. For the fiscal year ended 31 March 2026, net asset value climbed 27.4 per cent, dwarfing the FTSE All-World Index’s 18 per cent gain. The share price delivered a total return of 26.8 per cent. Over the past twelve months the stock has surged 66 per cent, versus roughly 5 per cent for the FTSE 100, and now trades at €17.91 — within 5 per cent of its 52-week high of €18.85 and 51 per cent above the November trough.

At the heart of this outperformance sits SpaceX, which has become the trust’s single largest holding at over 19 per cent of total assets, valued at nearly £3bn. Scottish Mortgage originally invested around $200m in the rocket and satellite company between 2018 and 2021, a sum now estimated to be worth roughly $4bn. The trust books its stake based on a $1.25trn enterprise valuation, but market chatter around a potential initial public offering — with some estimates ranging from Ark Investment’s $1.75trn to more than $2trn — has opened a valuation gap that investors are betting will narrow.

The most immediate catalyst inside SpaceX is Starlink, whose satellite internet division generated quarterly revenue of $3.3bn — 69 per cent of the group’s total — alongside operating profit of $1.19bn. Reports of a potential IPO roadshow as early as June have focused attention on the revaluation that would follow a public listing. Any adjustment closer to the $2trn mark would force Scottish Mortgage to write up its book value significantly.

The trust’s portfolio remains heavily weighted toward North America (54.5 per cent) and technology (30 per cent), with total assets of £13.7bn as of March 2025. Private investments have been extended further; the trust poured £254m into unlisted companies during the recent year, nearly double the £132m deployed the year before. Other strategic priorities — artificial intelligence, digital finance and healthcare innovation — remain central, but it is SpaceX that is moving the needle most.

Operating discipline continues to keep costs in check. The ongoing charges ratio edged up to 0.33 per cent from 0.31 per cent, still low for an actively managed trust. Performance fees remain absent. Gearing was reduced to 11 per cent from 13 per cent, with borrowing costs around 3.6 per cent. Net income surged to £3.10bn from £1.22bn, and capital gains came in at £3.08bn.

The dividend streak also stays intact. A final payout of 2.97 pence per share is subject to shareholder approval at the annual general meeting in Edinburgh on 2 July, with payment due on 10 July. The stock goes ex-dividend on 11 June, marking the next milestone for a trust that has flipped from discount to premium and from buyback to issuance — all while keeping its biggest private wager at the centre of the story.