SMT thoughts and advice

caper7

I unfortunately bought some SMT towards its peak and have been sitting on a loss ever since. The share price has now picked up and I'm actually in profit and was thinking of selling until I saw some chat in the Citywire forum regarding SMT and the Space X IPO.

Could someone explain how this IPO will likely impact the SMT share price? Will it initially go up with all the excitement, will that likely be a very short lived spike? I heard SMT would probably sell some of their holding, what would that do to the share price? Obviously, there are no certainties, but if someone could walk me through the likely scenarios I'd be very grateful.

Equally, perhaps exiting SMT isn't the best play, is it worth keeping/ selling only half?

Any thoughts gratefully received.

InvesterJones

It depends how the IPO goes - if it does well then SMT might go up a bit. If it does badly SMT might go down a bit. If people gamble on it doing well and buy SMT in anticipation then it'll dilute the amount of spaceX in SMT (SMT can't immediately go out and buy more, at least until the IPO) so the IPO effect will be lessened, if people gamble on it doing badly and sell SMT in anticipation then it'll increase the proportion of spaceX in SMT (SMT can't immediately sell what they've got and can't for some period after the IPO either), slightly magnifying whatever IPO effect is. And then there's second round effects, and all the effects of people trying to predict how others will behave…

So sorry, can't answer if it's worth keeping or selling. If anyone could they'd be billionaires :D

mebu60

SpaceX helps Scottish Mortgage Investment Trust take off

TheBanker

https://forums.moneysavingexpert.com/discussion/comment/82022625#Comment_82022625

I thought SMT was an Investment Trust. People buying/selling SMT shares changes the share price, it doesn't make SMT buy or sell the underlying assets.

My view - the "hype" is already baked into the SMT price. What happens next depends on whether it turns out SMT have over or under valued their SpaceX position relative to what the market decides it's worth, once the dust settles after the IPO.

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/82022638#Comment_82022638

Yes you're completely right, they don't have to buy/sell.

caper7

https://forums.moneysavingexpert.com/discussion/comment/82022630#Comment_82022630

A fifth of the fund is Space X?! Had no idea they were in that deep.

jimjames

https://forums.moneysavingexpert.com/discussion/comment/82022911#Comment_82022911

It's been like it for a while. Advantage of the IPO is that it frees up the unlisted section of their portfolio which is getting close to limits.

poseidon1

I am also an SMT holder, and also noted that it has finally exceeded its previous November 2022 peak share price, which I put down almost exclusively to the forthcoming Spacex IPO.

This has pushed up the ' valuation' of their very significant shareholding ( probably the largest single holding of a UK retail investment company), to a level which now exceeds their overall 30% cap on private equity investments in the portfolio.

One would hope that might trigger a post IPO part disposal by SMT after the reduced lock up period the company has facilitated for insiders -

https://www.cnbc.com/2026/05/21/spacex-insiders-will-get-to-sell-shares-earlier-than-usual-after-the-ipo.html

A part sale could help restore the 30% private equity cap, with the proceeds then redeployed to greater diversify a highly concentrated portfolio and/or share buy back.

However my sense is that SMT maybe intent on holding Spacex for the very long term, which was my original reason for selling SMT straight after the IPO regardless of whether the markets accord Spacex the lofty valuations currently being vaunted.

However, I have rethought my decision for a quick sale, following Anthrophic's announcement to go public, given SMT also has a worthwhile stake in that company also. There maybe a bit more speculative growth to be had from that quarter.

kermchem

For a UK retail investment that has a large holding in one company you need to look at 3i and their holding in Action. SMT is nowhere near.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82022911#Comment_82022911

Yikes! and I was worried about SpaceX IPO as an index investor. Having one fifth of a fund in SpaceX would be a big sell indicator for me.

poseidon1

Hmm, one wonders if today's inverse movements between the Dow and Nasdaq possibly signals institutional investors beginning to display a degree of skeptism/fatigue of the AI story and rotating capital back into 'boring' industrials/financials.

https://share.google/ZCtlYWzUCadxBBU67

Maybe just a 1 day blip, but the Spacex IPO underwriting banks will be watching very carefully leading up to the float next week, bearing in mind Musk has been looking to trim the usual 4% to 7% underwriting fee all the way down to 0.75%. Today's events won't help his cause.