A growing number of firms are choosing to incorporate or move their state of incorporation to other states besides Delaware, at least if you believe comments on social media.
It appears that Nevada and Texas are on the rise as Delaware has lost some of its luster, and firms are looking for more business-friendly locales. Wyoming, known for being crypto-friendly, is also in the mix.
Perhaps the best-known critic of Delaware is Elon Musk, who migrated Tesla and SpaceX to Texas following a judgment against a board-directed remuneration package the Judge deemed excessive. While you may believe the proposed pay package was outlandish, it is for the Board of Directors to decide, not some arbitrary activist judge.
Coinbase GC Paul Grewal, who is highly active on X, recently warned that Delaware “is at serious risk of losing its standing as the leading state of incorporation for American companies.”
Of course, there is a LeaveDelware X account that emerged claiming that Delaware is no longer business-friendly as it has embraced extreme and radical ideologies like DEI, lawfare, and other forms of weaponization of government.
It is not clear who is operating the Leave Delaware X account.
However, others appear to be leaving or considering an exit from a state that flourishes due to its perceived advantages for corporations. Dropbox is reportedly moving its state of incorporation to Nevada.
Dropbox is also leaving Delaware. It’s happening. pic.twitter.com/SFBQ5jpo39
— Robert Anderson (@ProfRobAnderson) January 31, 2025
Legal Newsline reports that Meta is departing Delaware, too, due to the exorbitant fees and activist judges.
Bill Ackman, founder and CEO of Pershing Square, has announced that his holding company has decided to switch from Delaware to either Texas or Nevada. Once relatively obscure beyond Wall Street and CNBC, Ackman has emerged as an advocate for the Trump administration and against the left’s extremism.
The reports of a Delaware business exodus have caught the attention of Delaware Governor Matt Meyer, according to Bloomberg Law, who is said to be reviewing the issue. “We need to win the future,” said the Governor. It is not clear if the Governor will be able to reign in the courts.
So, are there enough firms exiting Delaware for more business-friendly states to impact the economics and revenue of the state? Maybe not. At least not today. But as the saying goes, the change starts slowly, and then suddenly, it becomes very, very fast. Competition doesn’t just happen between public firms, it also happens between states and other jurisdictions – especially ones that take for granted historical dominance.