Scottish Mortgage Investment Trust (LSE:SMT) is a core holding in my Stocks and Shares ISA. And earlier this week, the FTSE 100 growth trust hit 1,500p per share for the first time since late 2021.
While it has pulled back a bit from this psychological barrier (as I write), the Scottish Mortgage share price is still up nearly 50% in the past year. So it has strong momentum right now, and shareholders can thank Elon Musk.
Extreme value creation
You see, Scottish Mortgage’s manager Baillie Gifford first invested in SpaceX in December 2018. In total, the trust has invested £151m (around $200m at time of purchase).
Fast-forward to March 2026, that stake had mushroomed into a massive £2.98bn position — a 1,900% increase!
Musk’s rocket and satellite pioneer has generated huge excitement as it aims to raise as much as $75bn at IPO next month. So Scottish Mortgage’s valuation of SpaceX assumes a $1.25trn valuation.
This gives it a whopping 19.3% position in the portfolio, up from just 0.6% in 2019.
Needless to say, SpaceX has been the biggest contributor to the trust’s returns over one, three, and five years. Over 10? Just the fifth biggest contributor!
This highlights the extreme returns that can be made through Scottish Mortgage’s strategy of investing in disruptive growth companies and holding them long term.
Lock-up concerns
The problem now, of course, is what to do with a (nice) problem called SpaceX. At around 20% of the portfolio, it will surely need to be trimmed to crystalise gains and rebalance the holding to reduce concentration risk.
But as the trust warns: “Regarding our lock-up terms, we do not yet know what restrictions will apply to existing shareholders post-listing, how long any lock-up period will last, or whether Scottish Mortgage will be subject to the same terms as other pre-IPO investors.”
A lock-up period is a set amount of time after a company goes public when insiders are banned from selling their shares. Basically, Scottish Mortgage didn’t know how long it would have to wait to sell shares.
From what I can gather from SpaceX’s newly released prospectus, existing investors will have to wait 180 days before selling. However, this could change, possibly giving Scottish Mortgage an earlier exit.
If not, though, the trust could be forced to forced to carry that massive SpaceX portfolio exposure through to around Christmas. And with the prospectus exposing heavy consolidated net losses — $4.27bn in Q1 2026 alone, driven by massive AI infrastructure spending — the post-IPO price action is surely going to be incredibly volatile.
A blessing in disguise?
Of course, this could be a blessing in disguise if SpaceX booms upon going public. I wouldn’t bet against that given the speculative mood in space/AI infrastructure stocks right now. Many retail investors will be chomping at the bit to get a piece of SpaceX!
Either way, the next few months are going to be eventful (things often are with Scottish Mortgage).
My move
So what am I doing? Well, I’m not going to sell my Scottish Mortgage shares, as I’m still bullish long term. I’ll keep holding.
But the next few weeks (at least) could be a binary bet on SpaceX. So investors considering the stock should be aware how volatile the stock could soon become.
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Ben McPoland has positions in Scottish Mortgage.
