Scottish Mortgage Widens Buyback Blitz as SpaceX Rout Deepens Portfolio Discount
Published on 07/27/2026 at 18:12 | Redaktion boerse-global.de
The Scottish Mortgage Investment Trust is fighting on two fronts: a bruising sell-off in its largest holding, SpaceX, and a widening gap between its share price and the underlying portfolio value that has forced the board to accelerate share repurchases at a pace not seen in months.
On Friday, July 24, the trust bought back 500,000 of its own shares at 1,320.22 pence each, adding to the 2.3 million shares it had already repurchased earlier in the month. The buyback campaign now leaves Scottish Mortgage holding 411,058,993 treasury shares, with 1,073,721,887 still in circulation. The strategy is textbook — shrink the supply of shares to narrow the discount to net asset value — but so far, the math hasn't cooperated.
That discount stood at 10.9 percent as of Friday's close, nearly double the 12-month average of 6.7 percent. The NAV per share was 1,473.69 pence, while the stock closed at 15.23 euros in German trading, down 0.98 percent on the day. Over the past month, the shares have shed 5.43 percent, and the 14-day relative strength index has fallen to 28.7 — a level that technical analysts typically read as oversold.
SpaceX: From IPO Euphoria to Reality Check
The root of the pressure is unmistakable. SpaceX, which accounts for 25.7 percent of Scottish Mortgage's assets, went public in mid-June at an issue price of $135, surged to a high of $211, and has since collapsed to around $115. That represents a loss of roughly half the peak-to-trough gain, and the slide has dragged the trust's London-listed shares down from a July 6 high of 1,509 pence to about 1,357 pence — a decline of roughly 12 percent.
Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?
The numbers behind the sell-off are sobering. SpaceX reported a loss of approximately $5 billion for 2025, followed by another $4 billion deficit in the first quarter of 2026. Those figures are putting pressure on a valuation that had been fueled by IPO euphoria rather than earnings momentum. The stock briefly dipped below its issue price before bargain hunters — including Cathie Wood's Ark Invest — stepped in to buy the dip.
In London on Monday, Scottish Mortgage shares recovered 3.32 percent to 15.73 euros, but they remain nearly 19.3 percent below the 52-week high of 19.50 euros reached in late May. The bounce may reflect a more nuanced read on SpaceX's trajectory: while the stock has been volatile, the underlying business — satellite-based connectivity and AI infrastructure — remains central to the trust's long-term thesis.
A Portfolio in Transition
The SpaceX drama is unfolding against a broader strategic overhaul. Portfolio managers Tom Slater and Lawrence Burns have outlined a pivot toward what they call the "agentic era" of artificial intelligence — companies building autonomous software agents capable of handling complex commercial and digital tasks without human intervention. The first phase of the AI boom, they argue, was about hardware and infrastructure, epitomized by Nvidia. The next phase belongs to the applications.
That shift has already claimed a high-profile casualty. In July 2026, after 13 years in the portfolio, Scottish Mortgage fully exited Tesla. The freed-up capital is being redeployed into satellite connectivity and AI infrastructure — bets the management team sees as more compelling for the coming decade.
The portfolio remains diversified across 101 holdings, with TSMC at 6.4 percent, Nvidia at 5 percent, and ByteDance and Amazon among the other top positions. But the sheer weight of SpaceX — a company that has been publicly traded for only a few weeks — means that one stock's fortunes disproportionately shape the trust's performance.
The Lock-Up Overhang
A fresh catalyst looms on August 6, when the lock-up period for SpaceX's pre-IPO shareholders expires. Market reports suggest up to 911 million additional shares could become tradable, a potential supply glut that would add further pressure to a stock already in retreat. That, in turn, would directly affect Scottish Mortgage's NAV, given the size of its position.
For now, Baillie Gifford, the firm that manages the trust, has held its ground. It had invested roughly 200 million pounds in SpaceX before the IPO through open-ended funds like the American Fund and Long Term Global Growth, and the stake was worth around 4 billion pounds at the time of the listing. Despite the subsequent rout, the investment trusts have not sold down their positions.
Analysts are cautious. Canaccord Genuity rated Scottish Mortgage a "hold" in mid-July, and the coming weeks are expected to test investor patience as the lock-up expiry adds another variable to an already volatile equation.
Strong Fundamentals, Weak Price
The disconnect between performance and price is stark. For the fiscal year through March 2026, Scottish Mortgage delivered a total NAV return of 27.4 percent, comfortably outpacing the FTSE All-World Index. Shareholders have also approved greater flexibility for private-market investments, allowing the trust to deploy an additional 250 million pounds into unlisted companies even if it temporarily breaches the 30 percent cap on private assets. The rationale: to support the trust's most successful private holdings through late-stage funding rounds without being forced to sell prematurely.
None of that has closed the discount. The buyback campaign — now running at an accelerated clip — is the board's most visible tool to signal confidence, but it has yet to reverse the trend. The stock is down 10 percent from its 50-day moving average of 16.93 euros, and the short-term picture remains strained even as the 12-month gain stands at a respectable 20.97 percent.
The coming weeks will test whether the SpaceX lock-up expiry and the trust's own buyback firepower can shift the narrative. For now, Scottish Mortgage is caught between a strong portfolio story and a market that is pricing in a very different outcome.
Ad
Scottish Mortgage Investment Stock: New Analysis - 27 July
Fresh Scottish Mortgage Investment information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
