Elon Musk Extends His Anywhere-but-Delaware Campaign

Elon Musk continues his flight from “the First State”

Another Elon Musk-led company has moved its home base from Delaware as the tech billionaire continues to criticize the state after a judge there voided his nearly $56 billion payday at Tesla.

Moving the incorporation of SpaceX, Musk’s privately held rocket giant, to Texas will help bolster the Lone Star State’s standing with business. But it remains unclear whether Tesla itself will be able to make the same journey.

Musk is making good on his threat to pull out of the state. “If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible,” he wrote in his announcement of SpaceX’s shift. It comes shortly after he relocated the incorporation of Neuralink, his brain implant company, to Nevada.

Dozens of states have sought in recent years to lure companies away from Delaware — which became the home base for much of corporate America because of its extensive business-friendly court system — by pitching themselves as being even friendlier. Musk endorsed that view, writing that having a Delaware incorporation is a “guarantee of spurious litigation.”

All eyes are on Tesla now. It’s up to the carmaker’s board and, more important, its shareholders to approve such a move. Those same investors were the focus of the decision last month by the Delaware chancellor Kathaleen McCormick to reject Musk’s pay package: She found that Tesla’s board didn’t sufficiently look out for investor interests in recommending the compensation scheme, and that it was unfair to other shareholders.

That said, Musk can exert significant pressure. He has already demanded a bigger voting stake in Tesla, threatening to move new artificial intelligence ventures into other parts of his business empire if he didn’t get his way. (All this is increasing the scrutiny on Tesla’s chair, Robyn Denholm, whom McCormick accused of having a “lackadaisical approach to her oversight obligations.”)