Scottish Mortgage: a premium in spring, a discount later, and shares reissued and bought back 10 pence apart

In the half-year to 30 September 2026, Scottish Mortgage reissued 40.95 million of its shares at a premium, at an average of 1,471p, then bought back 72.9 million at a discount, at 1,461p. Net, 2.97% of the shares in issue at 31 March were taken out of circulation. The two average prices sit 10 pence apart: in between, net asset value per share, up 31.2% over the half-year, rose above that price, and the premium became a discount (Opulion reading).

Why it matters for Scottish Mortgage shareholders: a premium or a discount measures the gap between the share price and net asset value per share, not the level of the price. Reissuing above net asset value and buying back below it enriches each remaining share: the chairman speaks of NAV-accretive balance sheet management (p. 2). Net, the trust took 31,974,948 shares out of circulation, 2.97% of the 1,078,166,806 in issue at 31 March, for a net £462.8m (buybacks less reissues, Opulion calculation: 1,065.2 − 602.4), or, as a yardstick, 2.6% of its £17,687.5m of shareholders' funds at 30 September. For the shareholder who stays, the gain depends on the gap with net asset value on the day of each order, not on the price in sterling.

The chairman tells it in two stages (p. 2). From April to early June, demand allowed issuance at a premium: the trust sold back into the market shares it held in treasury, bought back earlier and kept in reserve. Then, after the return to a discount, it bought back. The share counts reconcile to the share: treasury shares rose from 406,614,074 at 31 March to 438,589,022 at 30 September, 31,974,948 more, the buybacks less the reissues (note 9). Our analysis of 27 October counted 48,884,948 shares bought back from July to September: the remaining 24 million or so were bought before July (Opulion calculation).

Over the same half-year, the trust repaid all its bank loans and a £50m debenture (note 7). Net gearing fell from 11.0% to 4.3%, reflecting the rise in the portfolio and the repayments, funded in part by sales of SpaceX, according to the chairman (p. 2). The report also dates what came next: at 4 November, SpaceX made up 11.1% of total assets, against 15.0% at 30 September (p. 2).

For Scottish Mortgage shareholders, three tests will come, in order. In early December, the monthly voting rights notice will give treasury shares at 30 November, and so the pace of net buybacks. If the timetable holds, the portfolio valuation at 31 October, also expected in early December, will give the number of SpaceX shares held, after 24,661,560 at 30 September according to the portfolio valuation at that date, and make it possible to separate sales from the effect of the share price. On 8 December, according to the timetable set out in our analysis of 27 October, the end of the lock-up will release the balance of the SpaceX shares still subject to it. The fourth test will take longer: what the trust does with its room to manoeuvre, £241.6m of cash at 30 September (cash flow statement, p. 22) and authority to buy back 116,789,637 shares (note 9), tracked on the Scottish Mortgage company page.