SpaceX receives a "junk" ESG rating: Elon Musk's company is on par with Russia on the MSCI scale
MSCI assigned SpaceX a CCC rating — the lowest on its ESG scale, which measures management of environmental, social, and corporate governance risks. This decision was published just one day before the company's historic stock market debut, during which it managed to raise $75 billion.
With a CCC rating, SpaceX found itself on the same level as Russia, which MSCI gave a similar score after the events of 2022. On governance metrics, the company scored only 3.2 out of a possible 10 points, indicating critically high ESG risks and extremely weak control measures.
Minimum ESG Rating: What It Means for SpaceX
MSCI ESG Research evaluates parameters in the areas of environment, social factors, and corporate governance that can directly impact a company's financial results. The rating calculation considers risks, management system effectiveness, transparency, and the company's ability to offer products and services that positively affect society or the environment.
The rating scale ranges from AAA (leaders) to CCC (laggards). SpaceX ended up at the very bottom. According to MSCI's definition, companies with a CCC rating demonstrate "extremely weak management measures given the aggregate ESG risks and opportunities." Moreover, such organizations typically have already experienced serious scandals or are at the epicenter of them.
In terms of ESG scandals, SpaceX scored only 1 out of 10 points, receiving an "orange flag" — a warning for investors. At MSCI, any company starts with a maximum of 10 points, but points are reduced for each claim. A score of 3.2 points for governance is effectively a death sentence from the perspective of institutional investors, who are increasingly guided by ESG factors.
Historic Stock Market Debut with Sharp Correction
Despite the controversial ESG backdrop, SpaceX's IPO went through at a price of $135 per share, giving the company a valuation of $75 billion. June 12 became the largest debut in market history, even surpassing Saudi Aramco's record from 2019.
However, after listing on Nasdaq, SPCX quotes surged sharply but corrected just as quickly. On Thursday, shares closed at $184.98 — 18% below the relative high of over $225 recorded on Tuesday. Over two days, the company's market capitalization collapsed from $3 trillion to $2.37 trillion, a drop of approximately $620 billion.
Skepticism is even greater on crypto markets. On the Hyperliquid platform, large investors and whales hold a net short position of $45 million against SpaceX's growth. This suggests that professional players do not believe in the company's long-term potential amid such reputational and governance issues.
My view: A CCC rating is not just a formality. For institutional investors managing trillions of dollars, such an ESG status is a red line. SpaceX may face serious restrictions in accessing capital from "green" funds and pension savings. And given that a large short position is already open on Hyperliquid, the market is clearly pricing in further pressure on the stock. Investors should be extremely cautious.