Scottish Mortgage cuts SpaceX stake, exits Tesla investment

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Scottish Mortgage cuts SpaceX, Tesla

Highlights

Scottish Mortgage reduced its SpaceX holding to 11.1% of assets as of Wednesday, down from 15% at Sept. 30, citing portfolio balance.
The fund fully exited its Tesla investment in April after a 13-fold return since 2013, reallocating proceeds and ending a long-standing position.
SpaceX added 8 percentage points to Scottish Mortgage's returns, contributing to a 31.5% net asset value total return versus 16% for the FTSE All-World Index over six months.

Portfolio changes in half-year update

As reported by CNBC, citing Scottish Mortgage Investment Trust in its half-year results statement, SpaceX accounts for 11.1% of total assets as of Wednesday, down from 15% at Sept. 30. The London-listed closed-end fund also says it sold its remaining Tesla stake in April, ending an investment that began in 2013 and generated a 13-fold return on the original position.

The trust says SpaceX is still a major holding despite the reduction. It first invested in Elon Musk's rocket company in December 2018, when SpaceX had a reported valuation of about $31 billion, and committed roughly $200 million through 2021.

That investment rose sharply in value as SpaceX expanded its launch business and Starlink satellite network. By the time of its IPO in June, SpaceX represented roughly a quarter of Scottish Mortgage's portfolio by value.

The fund says it has sold shares as post-IPO lock-up restrictions have lifted in stages. Scottish Mortgage adds that its conviction in SpaceX remains high, describing the sale as a balance between strong conviction and disciplined portfolio management.

Returns and balance sheet impact

SpaceX is a major contributor to Scottish Mortgage's recent performance, adding 8 percentage points to returns during the period. The trust's net asset value posts a total return of 31.5% in the six months through Sept. 30, compared with 16% for the FTSE All-World Index, while its share price returns 33.8%.

Proceeds from the SpaceX sales also help the trust repay borrowings and reduce gearing. The moves show how the fund is using liquidity from a successful listing to strengthen its balance sheet while still keeping meaningful exposure to one of its largest long-term holdings.

Our earlier article on Musk’s Grok transaction guarantee outlined his claim that SpaceX would reimburse users for losses if the AI agent makes purchase errors or leaks card details during transactions. We noted that, unlike many other AI-agent terms that place liability on users, the scope of this pledge remains unclear, while real-world examples are already fuelling a broader debate about agent liability and financial-data risks.

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