SpaceX is looking to achieve its second big valuation increase in a year in a further round of fund raising and share sales that could be good news for Baillie Gifford trusts, including Scottish Mortgage and Edinburgh Worldwide which both hold the company as their largest holdings.
According to a Bloomberg report this week, SpaceX is considering a second tender offer to allow staff and company insiders to sell their shares to a select group of investors. This would coincide with a separate fund raising.
A valuation of around $400bn is being discussed which would represent a 14% hike on the $350bn valuation gained in a tender offer last December.
The company only broke through the $100bn valuation in October 2021.
The latest potential increase is said to reflect the progress of both Starlink, its satellite telecommunications business, and its Starship rocket programme.
SpaceX represents 7.2% of Scottish Mortgage (SMT) and 13.4% of Edinburgh Worldwide (EWI).
Gavin Trodd, analyst at Deutsche Numis, a corporate broker to £12bn Scottish Mortgage, said it was difficult to know if any changes to valuations had been made as Baillie Gifford was responsive to updating private equity positions in response to events and market developments.
However, given the $400bn was still press speculation, Trodd believed the valuation of SpaceX in both trusts remained at the $350bn point it was raised to late last year.
‘If press reports prove correct … we calculate it would imply potential uplifts to NAV [net asset value] of 1% for Scottish Mortgage and 1.9% for Edinburgh Worldwide,’ he said.
Stablemates Baillie Gifford US Growth (USA) and Schiehallion (MNTN), which have 11.1% and 9% invested in the private, unlisted company, could see uplifts of 1.3% and 1.5% respectively, he added.
All four Baillie Gifford trusts were badly hit in the growth sell-off of 2022-23 but have rallied sharply in the past three months as the threat of a global trade war, which knocked them in the first quarter, has receded with their share prices leaping 19%-30%.
Their shares continue to trade on wide discounts to asset value: SMT 9.5%, EWI 6.6%, USA 10.5% and MNTN 18%.
