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On the day that rumours spread about SpaceX being listed on the stock markets for the first time, one FTSE 100 stock rocketed to the top of the leaderboard.
That stock was Scottish Mortgage Investment Trust (LSE: SMT) – perhaps the best way for Brits to get exposure to the exciting aerospace company that is picking up where NASA left off.
Holdings
Before getting into the meat of the SpaceX IPO, here’s a quick word on Scottish Mortgage. The fund is a portfolio of listed and private stocks, of which SpaceX is only one part.
The stock choices are picked with an eye on rapid growth in exciting sectors. Netflix, Nvidia, and TikTok-owner ByteDance all make up some part of the fund. This is very far from a pure SpaceX play.
On the other hand, SpaceX is the fund’s biggest holding and by some distance too. Nearly a tenth of the overall market value is stored in the space firm. Therefore budding and current investors alike will want to pay attention to the rumoured IPO with interest. So let’s get into it.
Space age
The nuts and bolts of the deal are that SpaceX is planning to IPO in 2026 at a valuation of $1.5trn. It could be the largest public listing in history! The move will aim to raise around $30bn at first with an eye to those funds going on some very eye-catching projects.
The firm’s ‘Starship’ – which has test flights ongoing and is slated for first operational use as early as 2026 – aims to carry a crew of up to 100 people in journeys to the moon or Mars. The goal is space exploration and, dare I say, colonisation. If that sounds like a wildly audacious target, then you’re not far from the mark.
The ship will be reusable in as quick a turnaround as an aeroplane, with only hours between flights. It could even mean hour-long trips between any two places on Earth. The goal is, quite literally, to usher in the space age.
Other lofty plans include building data centres in space where heat dissipation is easier and solar energy is available 24/7.
It’s worth bearing in mind that speculating on technology that doesn’t exist is risky. Shell and BP have both walked back much of their green energy investments after poor returns. Meta (formerly Facebook) seems to be following in their footsteps after the ‘Metaverse’ simply didn’t catch on.
While the smallish nature of the SpaceX holding means it likely won’t send Scottish Mortgage into the stratosphere by itself, it could very well be the thin edge of the spacecraft. I think this kind of speculative growth stock is worth a serious look for an adventurous investor.
