Elon's Exodus: Tracking Musk's Business Incorporation State Changes
Billionaire Elon Musk is urging businesses to change their state of incorporation from Delaware to other states, like he is doing with his companies in response to a Delaware court voiding his Tesla compensation package.
Musk Urging Businesses to Change Incorporation State
Billionaire Elon Musk is encouraging businesses across the country to change their state of incorporation from Delaware to other states. This comes in response to a Delaware court voiding Musk's Tesla compensation package, which was worth $56 billion. The court ruled in favor of a shareholder's lawsuit, stating that Tesla's shareholders were not adequately informed about Musk's ties to the directors who approved the compensation plan.
In a post on X, Musk expressed his disappointment with the ruling and urged other entrepreneurs and founders to "never incorporate your company in the state of Delaware." He also announced that his companies, including SpaceX, will no longer consider acquiring a company incorporated in Delaware.
Musk believes that Delaware is known for spurious litigation, and he wants to avoid any potential legal complications for his businesses. He is actively encouraging other corporate leaders to follow suit and move their companies out of Delaware.
SpaceX's Switch to Texas
SpaceX, Musk's space exploration company, has already made the switch from Delaware to Texas for its business registration. Musk announced this change in a post on X, stating that SpaceX has moved its state of incorporation from Delaware to Texas. As a privately held company, SpaceX was able to make this move without facing significant scrutiny.
By changing its incorporation state, SpaceX aims to avoid any potential legal issues that could arise from being registered in Delaware. Musk's decision to move his own company serves as an example for other businesses considering a similar move.
Tesla's Potential Move to Texas
Tesla, the electric vehicle giant founded by Musk, is still incorporated in Delaware for the time being. However, Musk has expressed his intention to hold a shareholder vote to transfer Tesla's state of incorporation to Texas. This move is favored by the public, as indicated by a poll conducted on X.
While changing the registration state of a publicly traded company like Tesla comes with challenges and potential investor lawsuits, Musk is determined to follow through with the move. The timing of the shareholder vote has yet to be announced.
Changes in Incorporation State for Other Companies
Apart from SpaceX and Tesla, Musk's other major companies have also undergone changes in their incorporation states. After Musk acquired Twitter and rebranded it as X, the company's incorporation state was changed from Delaware to Nevada.
The Boring Company, which provides tunnel construction and equipment services, initially registered in Delaware but was later changed to Nevada. Neuralink, Musk's neurotechnology company, recently changed its incorporation state from Delaware to Nevada as well.
Furthermore, Musk's artificial intelligence company, xAI, was incorporated in Nevada from the beginning. Lastly, the Musk Foundation, a private foundation founded by Musk, is registered in Austin, Texas.
