The Scottish Mortgage Investment Trust (LSE:SMT) share price is up 30% since early March and it’s not difficult to fathom why. The rocket fuel behind the rally starts with ‘Space’ and ends with ‘X’.
Yes, the IPO of the trust’s top holding — SpaceX (NASDAQ:SPCX) — has been a roaring success. The firm raised $87.5bn ($10bn more than first thought) and the share price has jumped from an IPO price of $135 to $192 in just two days.
Plus, as I write, SpaceX is set for another rise today (16 June), pushing the share price above $200. This would put the rocket-satellite-AI company’s market cap close to $2.7trn!
Of course, this is all getting very silly now. So does SpaceX present a major risk to the Scottish Mortgage share price?
One for the trophy shelf
As a quick reminder, the FTSE 100 trust invested in SpaceX between December 2018 and August 2021. The total invested was £151m (roughly $200m at the time of purchase).
Fast forward to March 2026, the value of the stake had mushroomed to £2.98bn ($3.94bn). That was based on a valuation of $1.25trn, according to Baillie Gifford (the trust’s manager) at the time.
By early June, that looked too conservative, so it was raised for the third time in six months. According to calculations by QuotedData, this meant Baillie Gifford was valuing SpaceX at $1.6trn, putting the stake at around £3.5bn ($4.7trn).
Following the IPO though, SpaceX’s market cap has ballooned to more than $2.5trn, and keeps climbing. So this has been an enormously successful investment — one for the trophy shelf!
But with SpaceX now representing more than 21% of the portfolio, is there too much concentration risk here?
All eyes on August
Any lock-up period would affect our ability to manage position size in response to price movements after listing.
Scottish Mortgage.
There might be, if SpaceX stock tanks before early August. That’s when SpaceX is scheduled to report its Q2 earnings.
It’s also when Scottish Mortgage, as a pre-existing shareholder, can first unload a chunk of its long-held stake to crystallise profits and reduce risk. Regardless of where the share price is trading then, the trust can offload 20% of its shares.
But it could be 30% — an additional 10% — if the stock is at least 30% above the IPO price at that point. So that would be about $176.
With SpaceX currently riding high above $200, that looks very doable. But things can change rapidly in the stock market and nothing is guaranteed (except volatility).
Additional shares can be sold in 7% instalments between August and mid-December when the lock-up restrictions end.
