Scottish Mortgage Investment Trust PLC (LSE:SMT) climbed around 3% to lead the FTSE 100 on Tuesday morning, buoyed by the blockbuster stock market debut of SpaceX (NASDAQ:SPCX), the AI, rocket and satellite company that is its largest single holding.
The Baillie Gifford-managed investment trust is one of the most direct routes for UK investors to gain exposure to Elon Musk's space empire, and its shares track those fortunes closely.
SpaceX floated on the Nasdaq on Friday in the largest initial public offering in history, raising $75 billion and closing its first session up around 19% at $160.95.
The stock then jumped a further 20% on Monday, lifting SpaceX's market value above $2 trillion and making Musk the world's first trillionaire.
That surge matters for Scottish Mortgage because the holding had until now been carried at a deliberately conservative private valuation.
SpaceX accounted for 17.9% of the trust's portfolio as of 30 April, its largest position by some distance, having been trimmed in weighting from 19.3% at the end of March.
Scottish Mortgage first invested in December 2018 and deployed capital until August 2021, putting in a total of £151 million, roughly $200 million at the time.
That stake had grown to a paper value of close to £3 billion before the float, an increase of around 19 times the original outlay.
The trust had valued SpaceX below the company's mooted listing price, leaving room for an uplift to net asset value now that a public market price exists.
SpaceX has been the single largest contributor to Scottish Mortgage's returns over one, three and five years.
The position also carries concentration risk, since net asset value will now swing with a volatile, newly listed stock that some analysts already consider overvalued.
CFRA initiated coverage with a sell rating, citing the company's ambitious growth strategy and heavy capital spending.
Other Baillie Gifford trusts, including Edinburgh Worldwide and Baillie Gifford US Growth, also hold SpaceX and stand to benefit.