SpaceX received a "junk" ESG rating from MSCI: the company was placed on the same level as Russia.
MSCI assigned SpaceX a CCC rating on its ESG scale, which assesses environmental, social, and governance risks. This is the lowest possible rating, and it was published literally a day before the company's historic stock exchange listing, during which it managed to raise $75 billion.
With a CCC rating, SpaceX found itself on the same bottom rung where MSCI previously placed Russia after the events of 2022. On governance metrics, Elon Musk's company scored only 3.2 out of 10. The agency directly points to high ESG risks and insufficient measures to control them.
Minimum Score on the MSCI Scale
MSCI ESG Research assesses how effectively a company manages risks in the areas of environment, social policy, and corporate governance that could affect its financial results. The scale ranges from AAA (leaders) to CCC (laggards).
"Companies with a CCC rating receive the lowest ESG rating. 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 serious scandals or have recently been implicated in them," states the MSCI definition.
In terms of ESG scandals, SpaceX scored only 1 out of 10 and received an "orange flag." In MSCI, any company starts with a maximum of 10 points, after which points are deducted for each claim.
Historic Debut with Sharp Correction
SpaceX (SPCX) shares surged after listing on the U.S. stock exchange: the IPO was priced at $135, giving the company a valuation of $75 billion. June 12 marked the largest debut in market history, even surpassing the record set by Saudi Aramco in 2019.
However, after listing on the Nasdaq, quotes rose 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.
On crypto markets, skepticism has grown even more. On the Hyperliquid platform, large investors and whales hold a net short position of $45 million against the rise in SpaceX's value.
My analysis: This case is a vivid illustration of how public markets are increasingly considering ESG factors when evaluating companies. For SpaceX, despite its technological breakthroughs, a low ESG rating could become a serious barrier to attracting institutional investors, especially those following sustainable development mandates. In the short term, this adds volatility to the stock, and in the long term, it may require the company to reconsider its approaches to corporate governance and environmental reporting.