SpaceX received a "junk" ESG rating from MSCI: at the level of CCC and in the same category as Russia.
Elon Musk's space giant, SpaceX, received a CCC rating from the MSCI agency on the ESG scale. This is the lowest possible score. Ironically, the decision was announced literally a day before the company's historic stock market debut, during which it managed to raise $75 billion.
A CCC rating is the "red zone" in MSCI's methodology. It means the company demonstrates extremely weak management of environmental, social, and governance risks. Notably, Russia found itself on the same bottom rung of the scale following the events of 2022. Now SpaceX is in the same category.
On governance metrics, SpaceX scored only 3.2 points out of a possible 10. The agency points to high aggregate ESG risks and insufficient measures to control them. Overall, in terms of the degree of ESG controversies, the company scored just 1 point out of 10, receiving a so-called "orange flag." At MSCI, any company starts with a maximum of 10 points, but points are deducted for each claim. SpaceX, apparently, has accumulated quite a few such claims.
Historic stock market debut with sharp correction
Despite the gloomy ESG backdrop, SpaceX's IPO on the US stock exchange took place at a price of $135 per share, giving the company a valuation of $75 billion. This became the largest debut in market history, surpassing even the record of Saudi Aramco in 2019. SPCX shares soared to above $225, but then a sharp correction followed. By Thursday's close, the price had fallen 18% from its peak, dropping to $184.98.
Over two days, the company's market capitalization collapsed by approximately $620 billion — 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 the growth of SpaceX's value.
Expert opinion: The CCC rating from MSCI is a serious signal for institutional investors, many of whom are required to consider ESG factors. Although this may not matter for retail traders and crypto speculators, in the long term, weak governance practices and reputational risks could become a significant brake on the growth of SpaceX's capitalization. The current correction after the IPO is just the first warning sign.