SpaceX rang up the biggest retail buying day for any IPO in history while carrying a governance score that matches Putin's Russia — and ordinary Americans are the ones buying the bag.
Elon Musk's rockets-to-AI conglomerate raised $75 billion in its June 12 debut, with shares popping 19 percent and briefly pushing the company's valuation past $2 trillion. The company is currently unprofitable. But that didn't stop retail traders from pouring $117.6 million into the stock on day one — the largest retail net buy for any debut ever — after SpaceX allocated a record 20 percent of IPO shares to mom-and-pop investors, according to Reuters.
The mania is real. The problem: one day before that debut, MSCI slapped SpaceX with a 3.2 out of 10 on governance — the same neighborhood as Russia's sovereign rating. The system starts companies at 10 and deducts points for red flags. SpaceX also scored a 1 out of 10 on MSCI's controversies category and earned an "orange flag," reserved for firms with direct involvement in severe ongoing controversies.
Reuters celebrated the trading frenzy and options volume. Benzinga reported the governance gutter score. Neither outlet connected the two: the same retail investors being funneled into a company with limited shareholder rights, insider control, questionable board independence, and possible conflicts of interest — all flagged by critics since the IPO filing.
Musk has called ESG ratings a "scam" that has been "weaponized by phony social justice warriors," and he has a point — the ESG industrial complex is largely a racket run by the same institutional class that now stands to profit off SpaceX's public debut. But dismissing the referee doesn't mean the calls are wrong. The governance concerns here are structural: insider control, pay oversight gaps, and a conglomerate structure that bundles Starlink, space operations, and the AI startup xAI under one opaque roof. That AI angle is worth watching — xAI gives Musk a vehicle inside SpaceX to chase the same AI chip bonanza that has insiders across Silicon Valley cashing out at record pace while retail holds the risk.
The stock has already started slipping. SpaceX shares fell 3.56 percent to $185.00 in Thursday's regular session, then dropped another 1.84 percent overnight. Benzinga's Edge Rankings show poor price trends across short-, medium-, and long-term horizons.
The same Wall Street apparatus that champions ESG scores to dictate corporate behavior is underwriting and profiting from a company that flunks every governance metric they claim to care about. Retail investors, told they were getting in on the ground floor, are now watching the elevator head down.
The open question: when the AI hype cools and the losses keep compounding, who absorbs the damage — the insiders who set the share structure, or the retail traders who were handed 20 percent of the dream?
