Elon Musk moved the incorporation of his brain implant business Neuralink to Nevada. In a move that further strained relations with Delaware, where a judge recently revoked the billionaire’s $56 billion compensation package from Tesla.
Documents submitted to the Nevada Secretary of State’s office indicate that the transfer from Delaware to Nevada was finished on Thursday.
Musk’s action comes after Delaware Judge Kathaleen McCormick decided late last month to revoke Elon Musk’s enormous compensation package, which the Tesla board had given him subject to him hitting aggressive growth goals.
What did Elon Musk say?
Following the verdict, Elon Musk said, “Never incorporate your company in the state of Delaware,” on his owned social networking site, X.
Several of Elon Musk’s other endeavors are also incorporated in Nevada, including Neuralink, which he recently declared had successfully inserted an electrode into a human brain for the first time. These consist of X and xAI, the start-up focused on artificial intelligence that Elon Musk is funding.
In light of the Delaware ruling, he has promised to allow shareholders to vote on whether or not Tesla should change its incorporation to Texas.
Delaware continues to be the preferred location for multinational corporations, mostly because of its clear and stable corporate legal framework. Approximately two-thirds of the Fortune 500 are state-incorporated companies. Corporations find the state appealing due to its established legal community and decades of precedent that are difficult to imitate.
A growing number of publicly traded corporations with significant controlling shareholders are choosing to locate in Nevada. When boards have such significant stockholders, the state tends to be more subservient to their judgments. Greg Maffei, the company’s owner, reportedly tried to relocate TripAdvisor from Delaware to Nevada.
To appease sizable institutional investors like mutual funds, many private firms may relocate to Delaware just before launching an IPO.
Bloomberg was the first to report on Elon Musk’s intention to move Neuralink’s incorporation from Delaware to Nevada.
