Baillie Gifford's Tech-Heavy Investment Trusts May Benefit from SpaceX's Estimated $400bn Valuation

Strategic Insights -

Baillie Gifford's investment trusts, which have significant holdings in SpaceX, could experience a boost in value due to the company's reported sale of employee shares at a valuation of $400bn. This would represent a significant increase from the $210bn valuation in mid-2024, following a tender offer that took the valuation to $350bn in December. The repurchase of shares values them at $212 each, a 14% increase on the end of last year. As a major backer of SpaceX, Baillie Gifford's flagship Scottish Mortgage (SMT) would likely benefit from this increase in valuation, with SpaceX being the top holding in the trust, making up 7.2% of the $13.2bn portfolio at the end of May.

Key Takeaways:

  • SpaceX's sale of employee shares at a valuation of $400bn could boost the value of Baillie Gifford's tech-heavy investment trusts.
  • Baillie Gifford's Scottish Mortgage (SMT) has the largest holding in SpaceX, with 7.2% of the $13.2bn portfolio allocated to the company.
  • The repurchase of shares values them at $212 each, a 14% increase on the end of last year.
  • The increase in valuation could help reduce the discounts on the investment trusts, with SMT trading at a 9.5% discount, EWI at 6.6%, USA at 10.5%, and MNTN at 18%.
  • Baillie Gifford's investment trusts have significant holdings in unlisted companies, making up 25% of SMT, 29% of EWI, and 35% of USA.
  • The group was valued at $210bn in mid-2024, but soared to $350bn in December following a tender offer.
  • SpaceX plans to launch a primary fundraising round, with employee and early investors selling a small number of new shares alongside the existing employee shares.

Statistics:

  • $400bn: The estimated valuation of SpaceX following the sale of employee shares.
  • $210bn: The valuation of SpaceX in mid-2024.
  • $350bn: The valuation of SpaceX in December following a tender offer.
  • $212: The repurchased value of shares, a 14% increase on the end of last year.
  • 7.2%: The percentage of Scottish Mortgage's $13.2bn portfolio allocated to SpaceX.
  • 25%, 29%, 35%: The percentage of SMT, EWI, and USA portfolios invested in unlisted companies.
  • 9.5%, 6.6%, 10.5%, 18%: The discounts on SMT, EWI, USA, and MNTN investment trusts.

Sources:

  • Bloomberg
  • Numis
  • Baillie Gifford
  • Association of Investment Companies