Tesla Inc (NASDAQ:TSLA) CEO Elon Musk on Thursday urged other companies to shift their state of incorporation outside Delaware on the heels of the EV giant.
What Happened: "Change your state of incorporation out of Delaware before they lock the doors." Musk wrote on X. The CEO added that Delaware is currently preventing telecom businessman John Malone from shifting out of Delaware to Nevada. Malone is a repeat player before Delaware courts.
While more companies are eyeing moving out of Delaware to Nevada, Tesla is eyeing moving to Texas as it is physically headquartered in the Lone Star state, Musk said.
Change your state of incorporation out of Delaware before they lock the doors.
They are currently blocking John Malone from changing incorporation from Delaware to Nevada.— Elon Musk (@elonmusk) February 1, 2024
Why It Matters: Musk on Thursday said that the company will hold a shareholder vote on transferring the company's state of incorporation to Texas from Delaware after a Twitter poll on the matter witnessed more voters leaning towards incorporating the company in the state where it is headquartered.
Musk started the poll on X after a Delaware judge ruled his $56 billion pay package devised in 2018 to be "an unfathomable sum" and revoked it.
After the court ruling on Tuesday, however, Musk said, "Never incorporate your company in the state of Delaware." The CEO instead recommended either Nevada or Texas, arguing that these states would better serve the interests of shareholders.
Musk shifted Tesla's headquarters from California to Texas in 2021 citing disagreements with California's regulations including taxation laws.
Photo by Frederic Legrand – COMEO on Shutterstock
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