Faith-based investors shun SpaceX despite market hype

Ethical concerns outweigh financial opportunity for some institutional investors.

A growing number of faith-based investment managers are excluding SpaceX from portfolios over ethical concerns, despite the aerospace and tech giant’s meteoric rise.

Among them is $5 billion asset manager Inspire Investing, which said it will not hold SpaceX in any of its exchange-traded funds after assigning the company a negative rating on its ‘investability’ scale, which prioritizes biblical values, according to a report by World News Group.

The firm's decision is based on SpaceX's ownership of X, the social media platform formerly known as Twitter, which Inspire says fails its biblical standards because of concerns over the platform's handling of harmful and sexually exploitative content, particularly involving children.

Finny Kuruvilla, co-CIO of fellow faith-based investor Eventide Asset Management, added that under SpaceX’s current corporate structure, it’s impossible for investors to avoid investment in X and SpaceXAI, thereby “taking on ethical responsibility for those activities” as shareholders.

The decision illustrates how values-based investing continues to evolve. Rather than focusing solely on traditional ESG metrics like climate and diversity, many investors are increasingly evaluating the broader corporate structures of companies, including the conduct of subsidiaries and affiliated businesses.

For shareholders, the exclusions are unlikely to have a material impact on demand for SpaceX shares given the company's size and popularity.

However, they highlight a broader debate over how investors should assess companies whose operations span multiple industries with differing ethical risk profiles.

The discussion also comes as scrutiny of AI and social media platforms continues to intensify.

Regulators, investors and advocacy groups are placing greater emphasis on content moderation, online safety and AI governance, creating new reputational and investment risks for companies with exposure to digital platforms.

Indeed, Dani Pinter, chief legal officer at the National Center on Sexual Exploitation’s Law Center, proposed a reform or elimination of Section 230 of the Communications Decency Act, which protects digital platforms like X from legal consequences if its users use the platform to distribute illegal, pornographic, or harmful material.

“The biggest lie that tech has sold everyone… is that… it’s capable of these incredible things, including AI, but its technology is not capable of reducing or preventing child exploitation imagery,” Pinter told World News Group. “I think we would see the industry self-correct immediately if they knew they were going to have to balance real liability.”

For institutional investors, the SpaceX debate underscores the continued importance of investment mandates alongside financial performance.

While many shareholders remain focused on the company's leadership in launch services, satellite communications, and space infrastructure, others are increasingly weighing governance and ethical considerations when allocating capital.

Investors will be watching whether other values-based asset managers adopt similar positions and whether ethical screening becomes a more significant factor in ownership of high-profile technology companies whose businesses extend beyond their primary markets.

SpaceX’s stock was trading at $149.07 at 09:51 on Thursday in New York, up 0.5% from Wednesday’s close. The stock is down 0.6% from its June 12 IPO.

Like this article? Sign up for our free newsletter.