Baillie Gifford managed investment trusts will share a multi-billion pound bounty from the $1.77 billion flotation later today of Elon Musk’s SpaceX.
The satellites, rocket launch and artificial intelligence company has raised $75 billion in a record-breaking initial public offering which values it at $1.77 trillion.
Scottish investment trusts Scottish Mortgage, Edinburgh Worldwide, Baillie Gifford US Growth and the Schiehallion Fund, have big holdings in the company.
SpaceX is the biggest holding for Edinburgh (c.19% of portfolio) and Scottish Mortgage (c.18%), each worth approximately £3.5 billion ($4.4 billion). It is also the biggest for Baillie Gifford US Growth which holds a 13.8% stake worth about $2.44bn.
It is the second-largest holding in Baillie Gifford’s private-equity focused trust Schiehallion (11.8%), which invests in later-stage private businesses.
Scottish Mortgage, which made a killing in Tesla, first invested in SpaceX in December 2018 and continued directing capital into the business until August 2021.
The total amount it has invested is £151m with no additional capital deployed in the last five years. Today’s valuation therefore represents a huge return.
The size of Edinburgh Worldwide’s stake was a key factor in New York hedge fund Saba Capital Management pursuing control of the trust.
SpaceX will rank seventh among America’s largest listed firms when its shares begin trading on the Nasdaq exchange. It is the largest IPO in history – more than three times the size of Alibaba’s 2014 offering.
It will also propel Mr Musk, the 54-year-old founder of SpaceX, to becoming the world’s first trillionaire.
SpaceX priced 555.6 million shares at $135 each and there is a big allocation to retail investors. The funds raised far surpass the previous record holder Saudi Aramco’s $29.4 billion listing in 2019.
The company was founded only four year ago and is loss-making, Most of its $18.7 billion in revenue last year came from its Starlink satellite internet business.
Despite that, individual investors have submitted more than $100 billion in orders, according to Bloomberg. The IPO has also attracted huge institutional investor demand. BlackRock reportedly put in an order for at least $5 billion worth of shares.
The listing is likely to encourage a new wave of IPOs with. OpenAI, the maker of ChatGPT, and rival Anthropic, taking steps toward stock market listings that will also exceed $1trn.
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