SpaceX received a "junk" ESG rating from MSCI: the company was compared to Russia
Elon Musk's aerospace giant, SpaceX, received a CCC rating from the MSCI agency — the worst possible score on the ESG (Environmental, Social, Governance) scale. This happened literally one day before the company's historic stock market listing, during which it managed to raise $75 billion.
With a CCC rating, SpaceX found itself on the same level as Russia, which MSCI downgraded to this level after the events of 2022. The agency rated the company's corporate governance at just 3.2 points out of 10, pointing to high ESG risks and insufficient measures to control them.
Minimum Score: What Lies Behind the CCC Rating?
MSCI ESG Research evaluates parameters in the areas of ecology, social factors, and corporate governance that could affect a company's financial results. The rating determination takes into account risks, management system effectiveness, transparency, and the company's ability to offer products and services that positively impact society or the environment.
The rating scale ranges from AAA (leaders) to CCC (laggards). SpaceX ended up at the very bottom. MSCI's definition states that companies with a CCC rating receive the minimum ESG score. Compared to global competitors, they have extremely weak management measures given the aggregate ESG risks and opportunities. Additionally, such organizations typically have already been involved in major scandals or have recently been implicated in them.
According to the Financial Times, in terms of ESG scandals, SpaceX scored 1 point out of 10 and received an "orange flag." In the governance category, the company scored 3.2 points out of 10. At MSCI, any company starts with a maximum of 10 points, after which points are deducted for each complaint.
Historic Stock Market Debut with Sharp Correction
After listing on the US stock exchange, SpaceX shares soared: the IPO was priced at $135, giving the company a valuation of $75 billion. June 12 became the largest debut in market history, surpassing the record set by Saudi Aramco in 2019.
However, after SPCX shares began trading on the Nasdaq, prices surged sharply but then quickly corrected. On Thursday, shares closed at $184.98 — 18% below the relative high (above $225) recorded on Tuesday.
Over two days, the company's value fell by approximately $620 billion. Its market capitalization dropped from $3 trillion to $2.37 trillion.
Skepticism has grown even more on crypto markets. On the Hyperliquid platform, large investors and whales hold a net short position of $45 million against SpaceX's growth.
Analyst's opinion: It is symbolic that a company aiming to conquer Mars received an "earthly" rating on par with a country currently under unprecedented sanctions. For investors, especially institutional ones, this is a serious signal: management risks at SpaceX remain extremely high, despite technological successes. And until the corporate culture changes, capital will flow away.