Shares of SpaceX fell 4% in overnight trading late on Sunday following the decision by global financial services firm MSCI Inc. to assign the aerospace company its lowest possible ESG rating. The downgrade places the firm among the weakest-rated companies in MSCI’s coverage universe and has prompted a characteristically sharp rebuttal from Chief Executive Elon Musk.
The drop in SPCX stock marks the second consecutive session of losses, pausing a dramatic rally that saw the shares surge more than 65% above their IPO price during the first week of trading. Beyond the rating cut, investors are currently weighing reports that SpaceX is considering a $20 billion bond sale to fund the rapid expansion of its artificial intelligence and space operations.
According to a report by the Financial Times, MSCI assigned SpaceX a CCC rating on 11 June, the bottom tier of its environmental, social, and governance scale. This assessment arrives shortly after the company’s blockbuster public market debut, just as major index providers fast-track the stock into key benchmarks—a move expected to drive billions of dollars in demand from passive funds.
MSCI noted that the CCC rating reflects SpaceX’s high exposure to ESG risks alongside insufficient management of those issues. The assessment firm also awarded SpaceX a score of just 1 out of 10 in its controversies category, and a governance score of 3.2 out of 10, placing the space exploration company in the same ESG tier as Russia following its 2022 invasion of Ukraine.
Responding to the downgrade on social media platform X late on Sunday, Musk dismissed the ESG framework for penalising emissions-intensive industries regardless of technological constraints, stating: “Unfortunately, electric rockets are impossible.”
