Current:Home > FinanceSpaceX moves incorporation to Texas, as Elon Musk continues to blast Delaware-InfoLens
SpaceX moves incorporation to Texas, as Elon Musk continues to blast Delaware
View Date:2024-12-23 14:30:16
Elon Musk's rocket company SpaceX has transferred its incorporation from Delaware to Texas, the CEO and co-founder posted on X.
The move comes just weeks after a Delaware judge struck down Musk's $55.8 billion pay package as CEO of Tesla, prompting the billionaire to lash out against the state on social media, urging other companies to depart Delaware as well.
"SpaceX has moved its state of incorporation from Delaware to Texas!" Musk wrote in a post on Tuesday, adding, "If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible."
At the root of Musk's ire is a lawsuit filed by a Tesla shareholder, Richard Tornetta, in 2018, accusing Musk and Tesla's board of directors of breaching their fiduciary duties to the company and its stockholders when they signed off on a multibillion-dollar pay plan agreement allegedly resulting in the unjust enrichment of Musk.
After failed attempts by Tesla to dismiss the lawsuit, Musk testified in November that he had no involvement in setting the terms of the payout. In January, however, Delaware Chancery Court Judge Kathaleen McCormick struck down the record pay package, ruling that the negotiation process was "flawed" and the price "unfair."
"Never incorporate your company in the state of Delaware," Musk posted on X following the ruling, later adding, "I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters."
Betting on Texas
SpaceX is Musk's second business to be reincorporated from Delaware to a new state since the January ruling. Neuralink, Musk's brain implant company, moved its legal corporate home from Delaware to Nevada earlier this month.
The switch came after Musk posted on X that he would "move immediately" to have Tesla shareholders hold a vote on transferring the company's corporate listing from Delaware to Texas, based on "unequivocal" public support.
Considered one of the most corporation-friendly states in terms of its laws, Delaware is the "leading domicile for U.S. and international corporations," with more than a million businesses incorporated there, according to the state's website.
"Delaware built its preferred state of incorporation business by being friendly to company management, not shareholders," Erik Gordon, a business and law professor at the University of Michigan, told CBS News earlier this month.
While Musk seems confident that Texas would provide a far more welcoming legal home for Tesla if he were to reincorporate his electric car company there, that might not necessarily be the case, according to one legal expert.
"The last thing Texas is going to want is a reputation that their corporate law is a game where billionaires always win, because then investors aren't going to trust it," University of Nevada law professor Benjamin Edwards told the Economic Times in a recent article.
Tesla shares rose 5% on Tuesday.
— The Associated Press contributed to this report.
- In:
- Tesla
veryGood! (2327)
Related
- New wildfires burn in US Northeast while bigger blazes rage out West
- Today’s Climate: August 26, 2010
- A riding student is shot by her Olympian trainer. Will he be found not guilty by reason of insanity?
- Can mandatory liability insurance for gun owners reduce violence? These local governments think so.
- McDonald's Version: New Bestie Bundle meals celebrate Swiftie friendship bracelets
- Selling Sunset's Maya Vander Welcomes Baby Following Miscarriage and Stillbirth
- Why are Canadian wildfires affecting the U.S.?
- Hidden audits reveal millions in overcharges by Medicare Advantage plans
- Saving for retirement? How to account for Social Security benefits
- Can the Environmental Movement Rally Around Hillary Clinton?
Ranking
- Sister Wives’ Kody Brown Explains His Stance on His Daughter Gwendlyn Brown’s Sexuality
- For patients with sickle cell disease, fertility care is about reproductive justice
- Today’s Climate: August 30, 2010
- Tori Spelling's Kids Taken to Urgent Care After Falling Ill From Mold Infestation at Home
- Quincy Jones' Cause of Death Revealed
- Can the Environmental Movement Rally Around Hillary Clinton?
- 'The Long COVID Survival Guide' to finding care and community
- Médicos y defensores denuncian un aumento de la desinformación sobre el aborto
Recommendation
-
U.S.-Mexico water agreement might bring relief to parched South Texas
-
Georgia's highest court reinstates ban on abortions after 6 weeks
-
Alo Yoga's New Sale Arrivals Are All You Need to Upgrade Your Athleticwear Game
-
Authorities are urging indoor masking in major cities as the 'tripledemic' rages
-
College football top five gets overhaul as Georgia, Miami both tumble in US LBM Coaches Poll
-
Protesters Arrested for Blocking Railroad in Call for Oil-by-Rail Moratorium
-
How some therapists are helping patients heal by tackling structural racism
-
Mindy Kaling’s Swimwear Collection Is Equally Chic and Comfortable