Ian Cowie: how I’m investing in space

Our columnist ducked the SpaceX IPO but has other exposure.

18th June 2026 10:22

Share on

Please don’t laugh but it’s beginning to look like my biggest investment mistake this year is going to be the biggest stock market flotation ever; Space Exploration Technologies Corp Class A (NASDAQ:SPCX).

Worries about its stratospheric valuation prompted me to sit out the initial public offering (IPO) and miss 18% share price appreciation since then, probably with more to come when tracker funds begin to buy next week.

Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

Thank heavens a relatively tiny investment trust helps to keep my spirits up, after quintupling its share price in little more than a year, before falling back to earth somewhat since then.

Seraphim Space Investment Trust Ord (LSE:SSIT) is now the third-most valuable holding among 53 assets in my “forever fund”.

Shares I bought for 53p in March last year - as reported here at that time - peaked at £2.84 last month before falling back to £2.05 this week.

At that price, Seraphim represents nearly 7% of the total value of my life savings, which is quite enough for a fund that is largely invested in loss-making, unlisted space technology.

To be candid, because it is important to report the rough as well as the smooth of stock market investment - and I know some of you enjoy my pratfalls more than my profits - I had intended to sell some if it hit 10% of the total after publishing its third-quarter results last month.

Sad to say, I needn’t have worried because - despite good Q3 numbers - the share price slumped. One explanation is profit-taking by investors more nimble than me.

Even so, diversification remains a simple way to avoid the risk of catastrophic capital destruction that is inherent in stock market investment.

Share prices can - and do - go to zero but, if we spread our money over many different companies, countries and currencies, they shouldn’t all go down at once.

Investment trusts usually provide diversification automatically for individual investors, although it is only fair to say that Seraphim is a poor example of this, with 47% of its net asset value (NAV) invested in the Finnish satellite-maker, ICEYE.

Not that such concentration has done Seraphim any harm since ICEYE snagged a €1.7 billion (£1.5 billion) contract with Rheinmetall AG (XETRA:RHM), the German defence giant, last November.

That served as a catalyst for the rerating of Seraphim because it raised awareness that three-quarters of its NAV is invested in defence-related space technology and two-thirds of the total is based in Europe, including Britain.

Both sectors have gained from America’s increasingly unpredictable foreign policy in general and its attitude toward the Ukraine war in particular.

Meanwhile, unit trusts formalise diversification, with the 10% limit being compulsory for them.

Although this old boy prefers investment trusts for several reasons, including the fact they are traded on the London Stock Exchange, I voluntarily follow unit trusts’ diversification rule, now my priority is to hang on to what I have got, rather than try to shoot the lights out with hit-or-miss moonshot investments.

That’s why I did not participate in the SpaceX $1.77 trillion (£1.34 trillion) IPO, which valued this artificial intelligence (AI) to satellites and space rockets conglomerate at 94 times revenues.

Bear in mind that sales are not the same thing as profits, which is why SpaceX lost $4.9 billion last year.

But, even if revenues were as good as profits, the SpaceX IPO still looked pricey. For comparison, the S&P 500 currently trades at 30 times earnings per share and the historic average price/earnings (P/E) multiple is 18 times.

Other worries that kept this small DIY investor on the sidelines include the fact that Elon Musk, the trillionaire and SpaceX founder, has retained 85% of the voting rights in this business.

So, investors who paid $135 per share in the IPO, or more than that recently, have no control over how this business is run.

Never mind the macroeconomics, though, purely personal factors also kept me away from the IPO launchpad.

In addition to my Seraphim shareholding, I have had exposure to SpaceX via two investment trusts that bought stakes in Musk’s moonshot several years ago at a fraction of the float price.

Edinburgh Worldwide Ord (LSE:EWI) was my first way in, and SpaceX still comprises 23% of EWI’s net asset value (NAV).

But I fled from a hostile takeover, widely reported elsewhere, and flipped my money into Scottish Mortgage Ord (LSE:SMT), which has 22% of NAV allocated to SpaceX. SMT shares I bought for £11.64 in March, as reported here at that time, were changing hands at £14.80 this week.

Clever old Baillie Gifford, the Edinburgh-based fund manager that runs both the trusts mentioned above, also obtained early exposure to SpaceX, at much lower prices than those being paid by investors today, via some of its other funds.

For example, Baillie Gifford US Growth Ord (LSE:USA) has 17% of its NAV in SpaceX, while the Schiehallion Fund Ord (LSE:MNTN) has 14% and Monks Ord (LSE:MNKS) has 2%.

Amid all the excitement about space technology, it is important for investors to remember that this is a very high-risk sector, which remains largely loss-making.

While I feel foolish about missing the SpaceX float, doubts remain about where the price will settle after tracker funds have jumped aboard Musk’s magnificent flying machine.

Here and now, this timid earthling prefers to explore extraterrestrial opportunities via tried and tested investment trusts. Going for growth is exciting but capital preservation is no laughing matter.

Ian Cowie is a freelance contributor and not a direct employee of interactive investor.

Ian Cowie is a shareholder in Scottish Mortgage (SMT) and Seraphim Space Investment Trust (SSIT) as part of a globally diversified portfolio of investment trusts and other shares.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox